Starter homes have become something of a non-starter in today’s housing market. According to a new data report from Realtor.com, there are roughly 300,000 fewer homes priced under $350,000 on the market today compared to June 2019, while today’s typical starter home cost of $344,000 is up from $256,000 seven years ago.
While entry-level buyers in the South and West are seeing more affordable listings and softening prices, Realtor.com found buyers in the Northeast are dealing with starter home prices that climbed 12.6% since 2022 and are now nearly 50% above pre-pandemic levels.
Realtor.com noted that 55.1% of active listings nationally in June 2019 were priced under $350,000. Today that figure is down to 37.6%. Furthermore, today’s typical starter home requires a recommended minimum household income of roughly $78,000, up from just $43,000 in 2019 — an increase of more than 80%. Median household income, by comparison, only increased by 28.3% over the same period, from about $69,000 to $88,100.
And while the inventory priced under $350,000 has grown by 220,000 homes since 2022, the affordable share of listings is only up 1.6 percentage points from a year ago.
“The starter home story looks completely different depending on where you’re standing,” said Hannah Jones, senior economist at Realtor.com. “In the South and West, builders spent the last few years chasing demand at the entry level, and buyers there are actually seeing more choices and better prices than they had two years ago. In the Northeast, that construction response never happened — prices kept climbing even as the rest of the housing market cooled. That divergence is exactly why the recovery feels so different depending on where you live.”
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