Currently Reading

Starter-Home Supply Falls


Starter-Home Supply Falls

Homes available for first-time buyers dropped 12 percent last year, and starter homes now comprise only 25 percent of the total number of homes

By Mike Chamernik, Associate Editor February 9, 2017
This article first appeared in the February 2017 issue of Pro Builder.

The decline and dearth of available homes was one of 2016’s big stories, and the lack of starter-home inventory will affect the market the most. According to Trulia’s Inventory and Price Watch, the number of available homes for the average first-time homebuyer dropped 12.1 percent last year, its sharpest year-over-year decrease in three years.

The inventory of starter homes, now totalling 293,059, comprises just 24.8 percent of the total number of homes. 

If finding a starter home is difficult, then paying for it is tough, too. Based on the median list price of $164,920, first-time buyers must spend 38.5 percent of their income on housing; 1.9 percentage points higher than last year. The rule of thumb is to spend no more than 30 percent of income on housing, and lenders generally require home payments to be less than 36 percent of income.

Starter homes are becoming increasingly unaffordable in several popular markets, including Denver, Los Angeles, Miami, Portland, Ore., Sacramento, Calif., San Diego, San Francisco, and Tacoma, Wash. Each market experienced a 5 percent or greater increase in the share of income needed to buy a starter home in 2016 versus 2015.

The Trulia report is based on the housing stock from Q4 2015 to Q4 2016 in the nation’s 100 largest metro areas.


Related Stories


Mortgage Demand Drops to 27-Year Low

The highest mortgage rates in two decades are causing buyers and prospective sellers to pull back from the housing market

Housing Markets

Florida Is Now the Second Most Valuable US Real Estate Market

Housing markets such as Florida are seeing substantial growth driven by an uptick in new construction

New-Home Sales

New-Home Sales Declined in August Due to High Mortgage Rates, Pricing Pressure

A housing affordability crisis is taking a toll on homebuyer demand and leading to a slowdown in new-home sales


Top Articles


More in Category

COVID-19 may be easing its grip on the U.S. after a disastrous two years, but lingering supply chain disruptions have builders holding onto their pandemic business tactics

An archive of NHQA-winning companies that represent home building's best in Total Quality Management

Don’t let the current hype about single-family B2R communities obscure the need to create long-term sustainability and asset value


Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.