Starter Home

As the end of the year looms, so do holiday plans and contemplating gift giving budgets – but not so much home buying (unless your dream home is on your Christmas wish list).

With a stable market and little competition in most areas, Autumn & Winter are considered the perfect time for buying a starter home. The inventory for starter homes also increases during the colder months.

A starter home is a small (usually 2 bedroom), low cost home built with first time home buyers in mind. Most are older homes, though some are new low cost developments or even patio homes and townhouses. The term starter home was coined in the post WWII Era when home buying for young families was highly encouraged to promote the American Dream, a dream over two-thirds of Americans still believe in. Starter homes are ideal for the individual (or couple) who are starting in a career, tired of renting and ready for the responsibility of home ownership.

Some experts now advise against starter homes saying that the first 5 years you pay only toward interest payments, and don’t build much equity to help you when you are ready to move up. If you have large life changes on the horizon – better income, having kids or relocation, it might be better to save for your forever home instead. Another regularly cited reason people skip the starter home is due to the burden of student loans, which nationally is at an all time high. However, buying a starter home still makes more financial sense than continuing to rent.

It is also possible that we are about to see a shift in terms. As Millennials begin their home searches and continue to dynamically change our world, it may be right for them to skip the starter home. What we see as a starter home may soon become the empty nester with newly freed parents sizing down from the family home to a project house they can make their own. The minimalist trend of the tiny house may make the starter home someone’s perfect forever home or, here in Houston, it may be someone’s start over home as they move into a bright future.