The "Starter Home" is Dead, amirite?

One thing is for sure. Realtors loved selling you a starter home.

by NaturalCollection 6 hours ago

"Here's your gift basket, I'll see you and another commission check in three or four years when you're ready for kids."

by Many_Historian_2789 6 hours ago

The value of your house is what you get for selling it: nothing more, nothing less. Until you sell it, you haven't made any money and any "valuation" is just made-up numbers. Here's the big question: do you really feel "absolutely terrible" for them? Then when you sell your "starter" house sell it for a more affordable price than market. If not, then your "absolutely terrible" feelings are crocodile tears.

by Anonymous 6 hours ago

Equity in property is a form of capital. Equity gained because the market went up is functionally no different than the $50,000 in equity you would have from paying off $50,000 of principal on the loan for that house. A legitimate property valuation is based on comparisons to similar houses sold recently in your market. It's a very good indication of its approximate value, and therefore a very good approximation of your buying power with whatever equity you have in it. Judging the legitimacy of someone else's empathy based on arbitrary self-imposed standards is absurd. A few people agreeing to sell their house below market value doesn't do any net good.

by Scary-Accident-2736 6 hours ago

You act like people have the option If you're financially ready to buy and a condo fits your needs for the next 5-7 years, it's a perfectly reasonable purchase rather than staying on the rental treadmill or overstretching for a "forever home" which is a dumb concept. What you want/need a a young 20-something is not necessarily the same as a mid 30-something with a family or as a late 50-something empty nester and beyond

by Anonymous 5 hours ago

Starter 2bd home in my area is around $300k. 4bd, adds 1,000 sqft, typically in a nicer area, better schools, and is around $425k. $300k downpayment is $9,000. $425k downpayment is $12,750 The difference in payments is like $200/mn. See the point I'm making? Let's say after 5 years you're ready for the upgrade as many young families are... The $425k home is now probably closer to $450 to 475k, and the downpayment is the traditional 20%, resulting in the buyer needing $95k in cash (before fees). What was a $4k or 5k difference is now nearly $100k boundary.

by Many_Historian_2789 5 hours ago

Damn, you live in a cheap place. What are is that?!

by Anonymous 5 hours ago

So the 4br is now the starter home.

by Anonymous 5 hours ago

True, but, you don't HAVE to put 20% down. That just eliminates the extra on your monthly payment

by Anonymous 5 hours ago

The economy that allowed for starter homes is dead, killed by the people who benefited from it initially. Combine that with landlords buying up anything that might pass for a starter home and turning around and renting it out for more than a mortgage payment would be on it.

by Sad-Definition 5 hours ago

What is FHLP?

by Anonymous 4 hours ago

First home loan program. Probably easier if I said FHA? Major benefit is the 3% down instead of 20% which most banks require.

by Many_Historian_2789 4 hours ago

When you talk macroeconomics, we leave the "I" statements at the door. Generally speaking, on a 30 year loan, seven years in will only reduce principal ~20%. Now, buying your second home, note you're restarting the amortization schedule.

by Many_Historian_2789 4 hours ago

That's only if you are making minimum payments. Making one extra payment per year shaves off 4-5 years and saves $70k in interest. And if you are buying a small home, you can usually start paying more as your pay increases.

by Anonymous 4 hours ago

Why on earth would anyone take a 30 yr mortgage out? That's ridiculous. Paid off first mortgage in 7 years, paid off second mortgage in 11 years and we're in no hurry to move. Why on earth would anyone find it sensible to take out a 30yr mortgage? That's a "I can't afford it" mortgage.

by Anonymous 3 hours ago

I think a starter home is still something that a lot of home buyers experience but the nature of the home has changed. Rather than being a relatively small house to start a family in and then transition to a larger home as the family grows, a lot of starter homes today are condos for single people and couples to live in before they have a family. While people still buy them, the traditional big home for a growing family is unnecessary because fewer people are ever having more than 2 children.

by gloveryazmin 3 hours ago

One thing I forsure agree on is the resale of a 1-2 bedroom

by Anonymous 3 hours ago

Work from home, aging parents, and children are all elements millennials need to add to the equation. It's been a mix of agreement / disagreement, and it will be interesting over a day to see where the wisdom of the crowd pulls its. (And you're welcome, haha)

by Many_Historian_2789 3 hours ago

Well, if tiktok said it...

by Many_Historian_2789 2 hours ago

It was an ad for their homes.

by Anonymous 2 hours ago

I'm curious as to why you think this is an unpopular opinion. Given the housing market, this is pretty much as common as you can get.

by ComprehensiveCar 2 hours ago

I see a fury of building small one - and two bedroom homes in my area. So I assume there's demand for the footprint. Also, the "starter home" is part of traditional wisdom, stepping stone econ, americana so I figured there would be pushback.

by Many_Historian_2789 2 hours ago

Keep voting red and it will get better… right?

by Anonymous 2 hours ago

Tbf, it didn't get much better voting blue either

by Anonymous 1 hour ago

It all depends on where you're at in the US. I bought a 1,000 sq ft, 2bd, 1.5 bath starter home for $72k in 2021. I'm within 20 minutes of a fairly large midwestern city and there's still decent starter homes under $100k today. Nice 3-5 bed homes are $300-$500k, so I'm able to build equity/savings until I can get into a better place that I definitely would not have qualified for in 2021.

by Shot-Programmer 1 hour ago

Anything that cuts down on consumerism is good.

by Fuzzy_Salamander1264 1 hour ago

I dont know that it cuts down on consumerism. Just raised the bar for entry to homeownership

by seamusbode 50 minutes ago

It's not entry though. It's actually convincing people they need to buy two houses eventually. A starter home and then a retirement home

by Fuzzy_Salamander1264 49 minutes ago

It is entry if you cantget your foot in the door. People buy/move based on the needs of their families

by seamusbode 21 minutes ago

So those people shouldn't buy houses at all, if they are going to move for their families. Or it seems like a bad idea.

by Fuzzy_Salamander1264 10 minutes ago

Moving based on your needs is pretty much why all people move.

by seamusbode 6 minutes ago