Starter homes represent a critical entry point for first-time buyers into the real estate market, with a median price of $250,000 in August 2024. Due to high interest rates and competitive markets, homeowners are staying in these properties longer than the previous norm of 3-7 years. However, the availability of starter homes is declining, and their definitions have shifted, with many now resembling smaller condos or townhouses rather than standalone houses, reflecting changing demographics and higher land costs.
"Starter homes aren't what they used to be," says Redfin Senior Economist Elijah de la Campa. "A decade ago, a turnkey four-bedroom house in a nice neighborhood was often considered a starter home, but today, a small fixer-upper condo is often all a first-time homebuyer can afford."
The cost of a starter home varies depending on location, but the median price of a starter home in August 2024 was $250,000.
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