News

Starter homes aren’t the problem.

People need different types of homes as a single professional vs family with kids vs retiree.

In a normal market, people would have the freedom to trade out to the right kind of house, and move to a new city if that’s what they want.

Different homes for different stages of life.

“Starter” homes usually refer to 1-2 bedroom homes that aren’t in great school districts. Historically, those are the homes young couples start in because they don’t have kids, and don’t need to pay for the extra square footage and school districts that they’re not going to use.

People don’t need 10+ kids either.

I grew up in an almost 3000 sq foot home with only 5 kids. I know you were using hyperbole with the ten kids thing, but it was cramped with 7. Always sharing bedrooms, never actually getting your own space, no playing music without bothering someone, hard to do homework when your sister is practicing her oboe. If you want a dining room table that fits everyone and a living room where your family can stretch out for a movie, you need the space. (Also I grew up in Florida so no basement or attic. Not sure how those figure into sq footage)

Give me 750ft^2 and 5 acres of woods with enough sunny space for growing some food.

I'd be thrilled.

My wife's best friend, however, has decided their 3500ft^2 2.5 floor + basement house on 3-4 acres with two sheds and a small barn (or xl shed?) isnt enough space for 2 dogs 3 cats and her and her husband.

They just bought this house last year.

I do not understand some people.

My $750/month mortgage is offended at the term starter home. I like to call it my "forever home".

This might be kinda unique, but I’m in a situation where I want to move to a different location (I mostly want something bike-able) and I’m remote so there is not that much of an urgency. It would be silly for me to get rid of my “starter home” because I got it at a very low interest rate.

I would kill for 1200sqft living in NYC

Maybe we shouldn't give tax Advantages to predatory corporate landlords.

Interest rates aren't causing this problem.

Low interest helps buyers compete against cash offers from investors and corpos.

When rates are high, it incentivizes that type of buyer because it's costing people who would live there more.

Now, traditional wisdom says higher interest encourages lending because banks like money. But times have changed, they get better returns on student loans, credit cards, or rent after they buy up homes.

There's just better investment opportunities for lenders, and instead of cracking down on the other ways they make money to make lending more attractive, were trying to pay them more to want to do mortgages.

Which is not sustainable.

1/4 of all homes in the Fort Worth area of Texas are owned by private corporations. That seems like a good place to start making changes.

You're forgetting landlords (of all sizes)

It's extremely common in my generation to sit on their first house to rent out as passive income, and plenty of private investment absorbing starter homes to rent as well

Got a fixed rate 30 year mortgage and I'm paying less today for twice the space than I was paying 15 years ago when I first bought my home. I have a friend who got a relatively tiny 1400 sqft row house for $80k back in 2006 and paid less than $1k/mo in rent + utilities for nearly a decade, until she got married and needed extra space for kids.

If you're confident you won't be moving for the next five years, a house or condo at a fixed rate is consistently a way better deal than chasing apartment teaser rates every 12 months. But landing that kind of space means a steady income in a professional career. Its not something folks in the service sector - with irregular hours and changes in location and depressed wages - can reliably count on.

In the end, this is far more a problem of shitty unreliable working conditions than best-practices for picking a residence.

The framing of the article's headline is bad, but the problem is that because people in starter homes can't trade up, first time buyers can't buy starter homes. Ultimately, the problem is that MORE people are stuck renting.

And that's purely descriptive. The people in the starter homes are not to blame, in any moral sense. But people read blame into it because emotionally resonant headlines get more clicks, so they frame it that way.

There is nowhere to go. I think that just about sums it up for people today. We have lost our freedom to not enough housing and there is no solution coming.

First, don't share any information that you're not comfortable with. I'm not trying to pry into your life. However, I'm not quite following this your numbers and seeing your same limits.

• 2017 house for $130k at 4% 30 year = $621/month for principal and interest
• 2024 house for $350k-$160k in current home appreciation-$3k (approx) in principal paid on current house means a mortgage on the new house of $187k at 7.5% = $1,318/month for principal and interest

So yes, your mortgage payment would be more than double what it is now, but the difference is only $5208/year more. That's certainly not nothing, but you also said...

even after more than doubling our income through job changes.

Does doubling your income still make $5208 more of housing cost per year difficult?

By pushing up your purchase price and getting a mortgage on a $400k home ($237,000 mortgage with your current equity) would push your monthly payment up to $1,673 or an extra $12,624/year over your current mortgage and interest payment. Unless your starting salaries were pretty low to begin with, it seems like this would possibly be in reach for you.

What am I missing?

Builders are artificially inflating prices by purposefully not building homes. They lobby for zoning laws that prevent the building of affordable apartment complexes and use it as an excuse for why they can’t build more homes. For example they will set an empty 1000 acres as commercial and say they can’t build there even though no one wants commercial buildings.

My town is building a shit load of apartments and townhomes. Everyone on nextdoor hates it. I can't entirely disagree either since infrastructure is lagging far behind for all the new residents.

The article did mention that it's affecting those that are renting because those with the house that is now "too small" can't sell it as the interest rates are too good to give up and the new larger house they'd want is now like 2x as expensive as it was in the past. That means that the house they have now won't become available for someone like me who's looking to buy a "starter home" so I, and people like me, are stuck renting forever.