What Is a Starter Home?

In the United States, many first-time home buyers after World War II sought to find inexpensive housing options outside of cities. Many of these buyers looked for smaller homes in need of some repair or updating in order to find a dwelling that was affordable but livable. This type of dwelling was known as a starter home, and it was usually sought after by young couples looking for a place to live for less money. The starter home could be renovated or updated, or it could simply be a stopgap dwelling until the buyer or buyers saved more money for a larger house.

In many instances, the starter home would be on a small parcel of land in a suburban neighborhood outside of a city, again to keep the price down. The house itself could range in design, size, and features, but generally, such homes were fairly simple, two-bedroom dwellings. The home may or may not have been move-in ready; it may have needed some work done to make it habitable, or otherwise needed some renovations before or after the move-in date. Buyers would seek out a starter home in part to fulfill the American Dream, a general sentiment expressed in the U.S. that all citizens are free to prosper and live comfortably.

As the century passed, more and more first-time home buyers began to avoid the starter home and look for homes that were move-in ready. This trend developed for many reasons: first, land prices began to rise, which meant the starter home price went up as well; second, more and more developers began building larger houses on the land because of the high price in order to ensure the homes fit the land value; and third, people began to make more money, which meant they could be more choosy about which homes they considered for dwelling. Other factors contributed to the decline of the starter home as well, though these are some of the most common.

Of course, starter homes still exist, though first-time buyers still tend to be more selective than they have been in the past. Fewer and fewer starter homes are being built, however, thereby limiting the choices of those home buyers who are in search of a smaller, less expensive dwelling. As the housing market changes, the availability and popularity of these starter homes will change, and a resurgence of these types of homes is certainly possible.