What do you mean, a "starter home"?
It's about messaging more than anything else
What are starter homes? It’s a way of communicating about the housing affordability crisis to a broader audience. It’s a way of talking about the housing supply crisis without incentivizing McMansions. It’s a way of saying that we all deserve simple, decent and affordable housing.
I’ve long bristled at the term “starter home.” To me, it implied that you should always be striving for bigger and better. That a simple home isn’t enough. That a small home isn’t enough. That the home you start out in isn’t enough.
U.S. News & World Report inadvertently captures the possible “ick” of the phrase with this explainer, my notes in parentheses:
Unlike a starter home, which focuses on the basics, a forever home is a larger single-family home (wow, that’s narrow!) where you can see yourself living for at least 10 years, according to Zillow. Forever homes are roughly double the price of starter homes (WOOF), with about 2,000 square feet of living space (Not necessarily the goal or correct size for smaller households), three bedrooms and two bathrooms. Forever homes have more space to accommodate life-changing events like a growing family.
Homeowners in forever homes have stable jobs (ok…) and like the area where they live (what does this even mean). Forever homes don’t necessarily have to be forever, but homeowners usually don’t have any plans to move in the near future.
“A forever home is one you intend to stay in for decades, whereas a starter home is often viewed as a stepping stone on your real estate journey,” Jordan says. (I don’t really want to embark on a real estate journey, I just want a cozy house!)
Similarly, this article from Rocket Mortgage lists these as the pros of a starter home: lower price point, lower property taxes, less upkeep, lower utility costs and less expensive to furnish and decorate. That sounds pretty good. In fact, that sounds like a home I’d like to stay in… forever?
What I’ve come to understand is that the concept of a starter home is as much about messaging as it is about anything else.
Just because it’s a home you “start” in doesn’t mean it’s one you have to leave later. It’s a starting point — and it can be a middle point and ending point too. But in order to start out as a homeowner, we need more modest, affordably priced homes in the market.
With that mindset shift, let’s talk about starter homes. Or as I like to call them, homes.
I’ve already written about houses (and cars) getting bigger, even while households are getting smaller, so you know that the average living area per person has doubled since the 1970s. Which isn’t to say that there aren’t large or multigenerational households out there! But the average U.S. household has shrunk, meaning that more units would be needed to house each family even if our population numbers stayed the same.
Starter homes — and for that matter, most Habitat homes built across the United States — are usually modest, say somewhere between 1,000 and 1,500 square feet. They are also generally low-frills, although of course that is subjective. At Habitat we aim to build to mission-aligned design standards, which means that we keep our core mission and purpose at the center of our construction decisions.
For my Habitat affiliate, it means being responsive to both household and community needs. We aim to build homes that are not only affordable to purchase, but affordable to maintain and operate. Smaller homes — and I’m not talking about tiny homes! — are less expensive to heat and cool, to maintain and to repair. We invest in energy efficiency and have now fully committed to building all-electric homes with central heating and cooling provided through high-efficiency heat pumps.
We also want to build in flexibility to our designs, usually choosing to maintain an open floor plan in the main living area to maximize potential uses. We make choices about amenities not based on their future resale values, but on the utility, flexibility or efficiency that they provide. Because remember, the transformational benefits that a home provides shouldn’t depend on selling that home. As Habitat’s design guidelines say:
The more affordably we build each home, the more homes we can affordably build.
To serve our mission, we need to provide the homes our buyers and our communities need, at the largest scale we can accomplish.
CNBC produced a pretty good segment last month to summarize the starter home supply problem:
The video is about ten minutes, and it has more of the private market nonsense than I’d like, but it’s actually worth the time to watch to get a sense of our current housing market conditions.
When it comes to starter homes that are affordable to the average American, we’re short about 800,000 units across the country. These entry-level homes cost more than ever, with prices increasing by more than 50% in just the past five years. Add in rising interest rates, and monthly housing payments for starter homes today are 100% higher than they were in 2020. It makes sense that less than a quarter of home sales last year were to first-time buyers.1
We need more starter homes — homes that can be middle and ending homes too. And even though the term is usually meant to evoke pictures of a single-family, detached home, there are a lot of housing types that can fit the bill of a starter home: condos, duplexes, townhouses and other forms of missing middle housing.
Surprising no one, private homebuilders are not building these houses. Construction costs are so expensive that builders generally focus on high-end luxury homes where they can still make a profit. So we need subsidy. As I’ve said many times, public and private support are the key to expanding access to homeownership. That’s the secret, if there is one.
Starter homes are about messaging. They’re about focusing in on one particular piece of the housing crisis and creating a common language so that folks from all sides of the political and policy spectrum can work to develop strategies to address a common goal. The concept of a starter home is easily understood and appreciated by most folks, so it can help provide clarity on what it is that we’re trying to build: simple, decent and affordable homes for the average working family.
Elsewhere
I was in DC last week with 500 advocates asking our elected officials to fight for housing affordability and the dignity of everyone to have a safe place to live. Immigrant, LGBTQIA, Black, brown, native, white, poor, urban, rural, red state, blue state, veteran, addicted, healthy, sick, disabled, young, old. We are called to build a world where everyone has a decent place to call home. Read more about Habitat on the Hill 2025 and our initiative to build more starter homes here.
Speaking of affordability, here’s my interview about the potential impacts of tariffs on Canadian and Mexican imports.
https://realestate.usnews.com/real-estate/articles/what-is-a-starter-home
For better or worse (usually the latter) folks need to anchor their understanding of subjects unfamiliar to them. A starter home is place to start on the homeowning journey. For far too many, that’s too big a leap to make in today’s marketplace.