Builders are favoring larger higher-priced homes as opposed to starter, entry-level homes. Why is this the case given the current lack of affordability in the United States? In the ninth episode of RiskWire: On the House, Veros’ Chief Economist, Eric Fox, and Sr. Research Economist, Reena Agrawal, explore this topic, and explain the reasoning behind this shift in new construction
Key takeaways from the episode:
- In the 1980’s, around 40% of homes were classified as starter homes. As of 2023, only 9% of homes were in that category.
- Builders face several challenges including fixed costs, regulations, and high land costs, which all push them towards larger, pricier homes.
- Zoning laws and resistance from communities limit affordable housing options. They often block higher-density or lower-cost housing.
- In the early 1990’s, the average age of a first-time home buyer was 28 years old. Fast-forward to today, and that average age is 40 years old.
Looking for the full analysis of these new construction trends? Watch the latest episode of RiskWire: On the House right now: Webcast & Interviews – RiskWire, powered by Veros
For ongoing economic updates and housing market insights, visit RiskWire.com! Also, you can find RiskWire: On the House on Apple Podcasts, Spotify, and YouTube Podcasts.
