The Average Price of a Starter Home Across the U.S.
Every homebuyer wants to know the average price of a starter home across the U.S. before they make the leap into homeownership. Getting an accurate picture of the cost of a starter home is the key to budgeting correctly and determining which areas of the country may offer more affordable housing. Knowing the current cost of a starter home across the U.S. is helpful for those who are just getting ready to purchase their first home, as well as those investing in multiple properties.
What Exactly is a Starter Home?
Before diving into the average cost of a starter home across the U.S., it is important to define what constitutes a starter home. Generally, a starter home refers to an entry-level home that is priced and sized to fit within a smaller budget and is typically aimed at first-time homebuyers. These homes are usually in established neighborhoods and feature fewer amenities than those found in more upscale, larger homes. A starter home may be a smaller single-family home or a condominium, townhome, or other type of property.
What Factors Impact the Average Cost of a Starter Home?
The cost of a starter home is largely determined by location and the current market conditions. Generally, starter homes can be found more affordably in rural locations or growing urban centers, compared to high-demand cities with a flourishing economy. Other factors that can impact the average cost of a starter home include the quality of amenities, local taxes and fees, the size of the home, and homebuilding regulations. All of these can greatly vary from one area to the next, thus affecting the average cost of starter homes.
What is the Average Cost of a Starter Home Across the U.S.?
According to a 2020 report by Zillow, the median list price of a starter home in the U.S. was $249,900. In addition, starter homes make up nearly one third of all current housing inventory, with over 6.3 million starter homes on the market nationwide.
Starter Homes by Region
The amount buyers can expect to spend on a starter home can vary based on which region of the U.S. they are looking to purchase in. Here is a breakdown of the median list price for starter homes across the country:
Northeast:
The median list price of a starter home in the Northeast is $285,000, with the most expensive starter homes located in Connecticut, New Hampshire, and Vermont.
Midwest:
The median list price of a starter home in the Midwest is $196,000, with the highest priced starter homes located in Iowa and Illinois.
South:
The median list price of a starter home in the South is $182,000, with the highest priced starter homes located in Virginia, Georgia, and the District of Columbia.
West:
The median list price of a starter home in the West is $337,000, with the highest priced starter homes located in California, Washington, and Oregon.
Exploring the Scenic & Affordable U.S. Starter Home Hotspots
If you’re looking to purchase a starter home with a lower median list price, there are plenty of scenic destinations across the country that offer affordable housing while still maintaining the quality of life of a larger city. Here are a few of the most attractive, low-cost U.S. starter home hotspots:
• Buffalo, New York: Buffalo offers an incredible quality of life and the median list price of a starter home is $175,000.
• Grand Rapids, Michigan: Grand Rapids is an arts and culture hub with an average starter home list price of $160,000.
• Louisville, Kentucky: Louisville is known for its artistic energy and its average starter home list price of $160,000.
• Memphis, Tennessee: Home to legendary music and history, Memphis has an average starter home list price of $139,000.
• Tulsa, Oklahoma: Tulsa is full of excitement and outdoor activities and the average starter home list price is only $130,000.
• Tucson, Arizona: Tucson boasts breathtaking scenery and an average starter home list price of $235,000.
• Virginia Beach, Virginia: Virginia Beach is a bustling city with an average starter home list price of $194,000.
The Cost of a Starter Home is Increasing
Unfortunately, the cost of purchasing a starter home is on the rise. According to Zillow, the median list price of starter homes has risen 3.7 percent year-over-year, while the list price of all homes has increased by 4.1 percent. This indicates that starter homes are becoming more expensive regardless of the region, though some areas are fighting the trend better than others.
Aspiring homebuyers can get a better idea of the average cost of a starter home across the U.S. and determine which regions may offer more affordable housing options. The median list price of a starter home in the U.S. is $249,900, though this number can vary significantly based on location, amenities, local taxes and fees, home size, and more. Despite the increasing cost of a starter home, there are still some affordable hotspots across the country where buyers can purchase a quality starter home at a lower cost.
