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A starter home is exactly what it sounds like: not necessarily your dream house, but a place you can afford while you build some equity and figure out what comes next. But for aspiring U.S. homeowners, that first rung of the ladder may feel out of reach.

The typical starter home — defined nationally as listings priced below $350,000 — now costs about $344,000, up from $256,000 in 2019, according to a new Realtor.com analysis.

Across the housing market, both home prices and mortgage rates are still elevated from the pandemic-era buying boom. And the supply of starter homes hasn’t fully recovered, with roughly 300,000 fewer listings than before the pandemic. A recent YouGov survey found that 67% of respondents who wanted to own a home felt it was financially unrealistic to buy one.

The good news, though, is that the starter home hasn’t disappeared. Instead, supply has grown by about 220,000 since bottoming out in 2022, according to Realtor.com data.

Yet, the recovery is strikingly uneven: Starter home prices are coming down in the South and West but still climbing in the Northeast and Midwest.

Starter Home Price Thresholds Vs. Pre-Pandemic and Peak Levels

Source: Realtor.com Starter Home Report. Note: Regional price thresholds are 80% of the median list price for the area

In the South, there are nearly 170,000 more listings under $350,000 since 2022; in the West, there’s roughly 23,000 more. Meanwhile, buyers in the Midwest and Northeast haven’t seen the supply of affordable homes improve.

Why can’t builders simply produce more modestly priced houses? Small, individual homes cost more per square foot to build, according to the National Association of Home Builders. Regulatory costs alone accounted for $131,734, or 26.4%, of the final price of a new single-family home — and those costs are up 40% over the last five years, according to a NAHB study.

In the Northeast, the starter home price threshold is now 50% higher than in 2019. The main hurdles to new construction there are the lack of developable land, restrictive zoning, and a continued reluctance among existing homeowners to sell, according to Realtor.com.

So what?

Realtor.com’s experts expect that the return to normal in the starter home market will continue to be slow and uneven. If you’re ready for homeownership but are searching for a realistic pathway, here are some things to consider:

First-time homebuyer assistance programs. Governments and nonprofits offer low or no-down-payment options for first-time homebuyers who meet certain requirements. For example, Federal Housing Administration loans allow for a down payment as low as 3.5% of the purchase price for borrowers with a minimum credit score of 580.

Your financial health. Your income and debt play a role when you’re applying for a mortgage. Lenders use your debt-to-income ratio to assess whether you have too much debt to afford your monthly mortgage payments. As you focus on becoming a homeowner, you may want to try lowering or even eliminating your debt.

Your down payment. To come to your real-life goal for a down payment, you can start by calculating how much house you can afford. Even though 20% down isn’t a given these days, it might still be a good idea if you can swing it. Then look for ways to save up, such as recurring transfers into a high-yield savings account like SoFi’s.

Related Reading

The Death of the Starter Home (Architectural Digest)

10 Things That Surprise Almost Every First-Time Homeowner (Quartz)

The State of the Nation’s Housing 2026 (Harvard University Joint Center for Housing Studies)

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