- The death of the affordable starter home makes the American Dream even more unattainable.
- It’s almost impossible to find a relatively cheap home to buy, and many would-be first-time homebuyers will likely struggle to find that starter home of their dreams.
- The skew between affordable houses and high priced homes has gotten even worse over the last year amid a frantic pandemic-fueled housing market.
Andy Kiersz from Insider writes:
“The dream of homeownership has been slipping through the fingers of Americans for decades. The death of the affordable starter home only makes this part of the American Dream more unattainable.
A generation ago, the norm was new houses being sold for under $200,000. Now, houses that cheap have all but vanished from the market.
Oxford Economics’ chief US economist, Gregory Daco, highlighted a chart created by economics blogger Bill McBride showing the distribution of new homes by price range going back to 2002.
That chart, using data from the Census bureau’s monthly report on new home sales and prices in the US released on Tuesday, shows that while over half of new homes sold in 2002 were priced at under $200,000, only about 2% fell in that range in July 2021. Meanwhile, the share of new homes selling for over $400,000 has steadily risen, with nearly half falling in that bracket last month:
It’s worth noting that the above figures are not adjusted for inflation. Going by the Bureau of Labor Statistics’ CPI inflation calculator, $200,000 in January 2002 would be worth about $308,000 in July 2021. Still, the average price of a new home in the US has roughly doubled over that period, well outstripping general inflation…”
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