As home prices rise at breakneck speeds in the D.C. metro area, the result is a record shortage of starter homes. According to WTOP News, Redfin defines a starter home as one priced in the lowest 20th to 35th percentile of home prices, and in Washington, D.C., the share of homes that meet that criterion is quickly dwindling.
Buying a starter home in the D.C. metro area requires an income of $90,000, which is 11% more than buyers were spending on similar properties just one year ago.
“There are very few listings of these homes. That means if you’re looking to buy a starter home, maybe you are not going to find one that meets all the specifications that you want,” said Redfin chief economist Daryl Fairweather. “Maybe it is not going to be close enough to the office, or it is not going to have the room that you need. You’re going to have to compromise in some way.”
Nationwide, the income needed to buy the typical starter home has risen 13% in the past year, because of both rising prices and higher mortgage rates. New listings for properties considered starter homes dropped 23% from a year in June.
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