By Marcie Geffner - Bankrate
First-time home buyers might well wonder: Where are all the starter houses?
Indeed, such properties can seem scarce in many housing markets.
A few reasons:
- Investors have snapped up a lot of smaller houses and turned them into rental properties.
- Flippers have bought smaller homes and remodeled them so they're no longer within the reach of first-time buyers.
- Many current homeowners don't have enough equity to move or would rather add on to a smaller house than give up a low-rate mortgage.
- Builders have opted to construct pricier trade-up homes instead of affordable starters.
How long will this last?
The slow pace of new home construction suggests that the dearth of starter homes might continue for some time.