It’s getting harder for first-time homebuyers to find suitable starter homes
The Metro Atlanta housing market has become an increasingly precarious place for first-time homebuyers, according to a detailed new report from Trulia.
In a deep analysis of the nation’s housing stock, Trulia found that starter homes – the affordably priced properties that first-time buyers purchase – have declined considerably in the last four years, while the remaining inventory has become more expensive.
The report’s findings for Metro Atlanta were:
- The median price for a starter home in Metro Atlanta is $75,450 in 2016’s first quarter, which is lower than many large metro areas.
- Metro Atlanta’s starter home inventory, though, has declined by 33.2 percent in the last four years, while the median price has risen 50.9 percent.
- Among buyers of starter homes, it requires 20.4 percent of their income to purchase such a property in Metro Atlanta, which is actually up 5.4 percentage points from 2012.
The situation was not much prettier on the national stage, where inventory has dropped 43.6 percent and starter homebuyers now need to put down 5.6 percent more of their income – which comes as an addition to the many economic problems of first-time homebuyers already face.
Starter Home Inventory on the Decline
Why has the inventory of starter homes fallen so dramatically? Trulia emphasized two reasons: first, investors gobbled up thousands of distressed properties during the downturn, and converted them to rentals; and second, millions of homeowners in lower price points remain underwater or near-underwater on their mortgages, and are therefore unable to list their homes.
Here is how Metro Atlanta’s starter-home market compares with other metro areas:
|U.S. Metro||Median Starter Home List Price, 2016 Q1||% Change in Starter Home Inventory||% Change in Median Starter Home List Price||% of Income Needed to Afford Median Starter Home|