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Millennials: Here’s where the most starter homes are

Aly J. Yale
Aly J. YaleThe Mortgage Reports Contributor

California dreamin’

Today’s younger home buyers have faced a dearth of starter homes in recent years, but it seems that some markets are bucking that trend. In fact, in San Francisco, nearly half of all home listings are entry-level properties.

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Starter home surges

According to new data from Trulia, over 40 percent of listings in San Francisco are starter homes. The city saw the biggest jump in starter home inventory in the nation last quarter, with listings jumping nearly 5 percentage points.

Considering a full quarter of the city’s homebuyers are Millennials, this could be good news for would-be shoppers. San Francisco also has the nation’s lowest “mismatch” score. According to Trulia’s analysis, this means the gap between what price points people are searching for and what’s actually on the market is narrow.

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Philadelphia is also seeing solid starter home inventory, as well as affordable pricing.

“In Philadelphia, Millennials looking to buy a home have a pretty good deal,” wrote Trulia’s Felipe Chacon. “In addition to having more affordable housing in general (34th most affordable among the largest 100 metros), 26.8 percent of all listings in Q1 2018 were considered starter homes, while only 22.7 percent of searches were for these homes.”

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Worst spots for starter homes

According to the same analysis, Houston is one of the worst spots for starter homes. The city saw starter home inventory drop 16.3 percent in the last quarter – likely due to home buying activity from 2017’s displaced Hurricane Harvey victims.

Buyers in Colorado Springs, Colorado, are also in dire straits when it to starter homes. During the first quarter of the year, nearly a third of all shoppers were looking for starter homes – which accounted for a mere 16.8 percent of listings.

“Starter home inventory is declining faster at the same time more people seem to be showing interest in them,” Chacon wrote.

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