The New Starter Home

I always tell first-time homebuyers that starter homes are just that: a place to begin. That first home is your entry into home ownership, and a pivotal stepping stone: it’s an opportunity to build equity which you can then leverage for your next home. This home does not need to be ‘perfect,’ but it does need to support how you live and be a place you can envision staying in for at least 3 years (and hopefully 5).

For years, the “starter home” was a modest single-family house with a yard, maybe a garage, and a little room to grow. But today’s market – with high home prices, mortgage rates and changing lifestyles - is redefining what that first home looks like for many people. And it’s opening up some accessible and smart opportunities.

Townhomes Are More Popular – and Available - Than Ever

For many buyers, townhomes have offer greater affordability, less work, more square footage for less money, and even higher end finishes. And for busy professionals and young families, not having to spend every weekend doing yard work can be a major bonus.

Here’s what they have going for them:

• Lower price points than detached homes

• Less exterior maintenance

• Updated finishes

• Walkable locations

• Community amenities

Condos Are Making a Comeback

For some buyers, owning a smaller place they love beats renting indefinitely while waiting for the “perfect” house.

Many condos offer::

• Convenience

• Lower maintenance

• Access to downtown areas

• Fitness centers and shared amenities

• Building security

• Shorter commutes

Smaller Homes Are Becoming Much More Popular

Bigger doesn’t automatically mean better. A well-designed 1,200 square foot home can often live larger than an outdated 2,000 square foot one. Pay attention to natural light, layout, storage, and outdoor space rather than just square footage

When looking at a home, ask:

• Does the space function well?

• Is the location near the things I need and like to do?

• Can I comfortably live here for at least 3 years?

The Bottom Line

Starter homes are just that: a place to start. If your goal is to ultimately have that three bedroom, two and a half bath single family home in a neighborhood you love, don’t get discouraged over what you can’t afford now. Think about what housing steps you need to take now to get you there.