‘Starter Homes’ Remain Draw for First-Time Buyers

Woman standing in living room of her new home

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Even with having to pay higher home prices, most first-time home buyers are still entering the housing market with the idea that the home they’re buying is a stepping stone into homeownership and will not be their forever home. Eighty-one percent of consumers recently surveyed believe buying a “starter home” to live in while saving for a “forever home” is a smart choice, according to a new survey of more than 1,100 Americans conducted by Rocket Homes.

Seventy-two percent of non-homeowners surveyed say they plan for their first home to be a starter home.

Homeowners report spending a median of five years in their first home, according to the survey.

The top reasons for still considering a starter home, according to respondents, is to help “ease” into homeownership or to try out a new location. Thirty-five percent of respondents said that buying a forever home right away was not an affordable option to them at this point in their lives.

Sixty percent of respondents say they prefer to stay under budget to buy a first home that needs major renovations or changes compared to 40% who said they prefer to go over budget for a home that doesn’t need major renovations.

A bar graph showing the reasons buyers consider a starter home.

But buyers still have some definite preferences when choosing their first home. For example, they’re drawn to smart home technology and hardwood flooring, the survey shows.

A bar graph showing the features buyers want in a starter home.