Hannah Jones reports that the national supply of starter homes is beginning to improve despite high mortgage rates and regional price disparities.

Hannah Jones, senior economist at Realtor.com, reports that the national supply of starter homes is beginning to improve, though high mortgage rates and prices continue to challenge first-time buyers. A new analysis shows the cost of a typical starter home has risen from $256,000 in 2019 to $344,000 today. Consequently, the annual household income required to qualify for an entry-level home has jumped from $43,000 to $78,000, a growth rate that has significantly outpaced median wage increases. The housing recovery remains geographically uneven. The South has seen the strongest turnaround, with prices dropping 3.5% from their pandemic peak due to aggressive new construction. The West has also seen significant improvements, particularly in markets like Denver and Phoenix. Conversely, the Northeast remains the most expensive region, where starter home prices have climbed 12.6% since 2022. While inventory has increased by 220,000 units since 2022, many buyers remain sidelined by high borrowing costs and a lingering shortage of affordable listings compared to pre-pandemic levels.

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