Summary
There is a shortage of affordable "starter homes" in many parts of the United States, including Austin, Texas. High construction costs and slow local regulations make it difficult for builders to supply these smaller homes, impacting first-time buyers.
Key Facts
- "Starter homes" are small, affordable houses for first-time buyers.
- Bidding wars in the housing market may be calming, and mortgage rates could drop below 6% next year.
- In Austin, Texas, the median home price in September was about $560,000, while median income supports a mortgage of about $350,000.
- Home builders are constructing fewer entry-level homes nationwide; only 12% of new homes in 2023 were considered entry-level.
- Rising construction costs, including tariffs on materials like Canadian lumber, increase home building expenses.
- Many homeowners with low mortgage rates are not selling their starter homes.
- Zoning changes in Austin now allow for more homes on a lot, but the approval process for new housing types is slow and costly.
