First-Time Home Buyer Map of America
Owning a home has long been a cornerstone of the American Dream. Before settling into a “dream home,” many first-time homebuyers look for a “starter home” instead. A starter home refers to a smaller, less expensive house that fulfills the buyer’s present needs, but that the buyer will probably outgrow over time. For example, a newly married couple may purchase a one-bedroom house as their starter home, but then sell it and purchase a four-bedroom house when they start a family. Our new visualization compares the median value of starter homes across the states, as well as how the median value of starter homes compares to the median values of all homes within the state.
- The most expensive starter homes tend to be located in the Northeast and the West Coast.
- The visualization does not take median wages, which also impact affordability, into consideration. For example, the annual median salaries in Oklahoma ($40,710) and West Virginia ($40,985) are similar, but the median value for a home is much more expensive in Oklahoma ($123,700) than in West Virginia ($97.300).
- In some states, the gap between the median value for starter homes and the median values for all homes is also larger than in others. For example, the median value of a starter home in West Virginia or Michigan is less than half the median value of all homes in the state. By contrast, the median value of a starter home in Rhode Island is about three-quarters of the median value of all homes in the state.
Business Insider teamed up with Zillow to find the median value of starter homes and the median value of all homes in each state, which is the basis for our visualization. To use a standard definition of “starter homes,” Zillow used its data from March 2019 to determine the value of the lower one-third of all homes in each state.
In the visualization, each state is represented as a circle. The larger circles represent higher median home values and the smaller circles represent median home values. The shades of purple within the circle show the median value of starter homes, with darker purple representing more expensive homes. The blue outline of the circle represents the median value of all homes in the state. Thicker blue lines indicate that there is a greater difference between median starter home values and all median home values.
Top 5 States by Starter Home Value
1. Washington, D.C. - $335,700
2. Hawaii - $331,500
3. California - $305,300
4. Colorado - $247,600
5. Washington - $243,700
Bottom 5 States by Starter Home Value
1. West Virginia - $42,300
2. Oklahoma - $50,700
3. Arkansas - $56,800
4. Michigan - $58,000
5. Kansas - $61,200
With skyrocketing housing prices, some millennials are bypassing the typical starter home and conserving their funds until they can buy their “forever home.” In addition, buyers looking for a starter home are likely to face stiff competition from investors. While the concept of the “starter home” hasn’t completely disappeared, it may be worth weighing whether a starter home is the best option or if it’s better to keep saving for a lifelong home.
Learn more about how the real estate market varies across the country, including how much you have to earn to buy a home in the 50 largest metros in the U.S. What has been your experience buying your first home? Please let us know in the comments.
Data: Table 1.1