First Time Buyers Foregoing Starter Homes

Dated: 04/10/2016

Views: 111

As millenials set out to purchase their first homes, a surprising trend is taking place.  Fewer are opting to purchase the typical "starter home" and  instead, choosing to save their funds to buy a longer term home, even if it means waiting years to do so.  Why is that?  

Because the cost of homes are on the rise and values are outpricing the average, young, first-time home buyer.  Take Austin, Texas, for example.  Starter homes are down almost 83% since 2012, according to Daniel Goldstein, Personal Finance Reporter and contributor to Market Watch.  Goldstein goes on to say that inventory is so low because of uptick in rental properties snatched up by investors during the recession.  Without these properties available for purchase, inventory decreases. 

How can we fix this in Austin, Texas?  For starters, moving out of the city and into the suburbs is a viable option for many first time home buyers.  There are affordable options in the surrounding areas - such as Cedar Park, Round Rock, Pflugerville, and Buda.  Furthermore, we can increase inventory by motivating those home owners currently in the "starter home" range (lower third of values) to sell.  It all comes down to the basic, economic fundamentals of supply  and demand.

Interested in affordable urban living?  Goldstein lists metro markets that still have starter home values.  These include Kansas City, Little Rock, and Memphis.  

Read more of Goldstein's Death of the Starter Home 

Blog author image

Sonia Comisarenco

Sonia was born in Argentina and has lived in the US since 1980 and in Austin since 2001. Besides being fully bilingual (English-Spanish), Sonia has made it her mission to gain extensive familiarity wi....

Latest Blog Posts

HOMESTEAD EXEMPTIONS

It's that Time of Year Again! Homestead Exemption applications are due by April 30th!!!  It is Free to file and limits the increase of property taxes. For more information chose your.

Read More

Purple Martin Migration

Purple Martins are a fantastic little songbird. They breed in North America and winter in South America. February is the season for Purple Martins to begin to migrate through the Austin area. ;

Read More

Say Yes To Pizza Go MOD

Pizza is one of those foods that I try to avoid, not only because it's unhealthy, but usually it's just bad. Either the crust is too thick, the sauce it's too sweet, or it doesn't have enough

Read More

Some Of Our Favorite Winter Things To Do In Austin

Some Of Our Favorite Winter Things To Do In Austin !!Even though we live in Texas, we do still (sort of) have a Winter. With the temperature cooling off, a lot of Austinites are looking for fun

Read More