Starter Home Inventory Steady in DC, But Dropping Nationally

by Nena Perry-Brown

How much of buyers’ income goes to housing nationwide

The nation’s supply of homes for sale continues to drop, falling for the sixth consecutive quarter, and according to Trulia, the starter home shortage is only worsening.

During the fourth quarter of 2016, first-time homebuyers saw homes available in their price point drop by 12.1 percent year-over-year — the steepest drop in three years. Consequently, those buyers are need to spend nearly 39 percent of their monthly income to make a home purchase, 1.9 percent more than in the fourth quarter of 2015.

Trade-up inventory has dropped even more dramatically over the past year, to the tune of 12.9 percent, further depressing the inventory of starter homes as their owners are less able to buy something else.

The starter inventory in the DC area has gone in a slightly different direction than the rest of the country. Fourth quarter starter home inventory in the region has not changed at all since the same time last year. On the other hand, the median listing price of $217,467 is an 8.7 percent increase year-over-year, requiring buyers to spend 32.4 percent of their income to purchase in this property segment. This means that based on the 36 percent affordability threshold, DC-area buyers (theoretically) are less cost-burdened than in many other places in the country.

The trade-up housing market is the only sector in the DC metro where inventory decreased, with 1.4 percent fewer listings than last year. The median listing price of $374,165 for these houses was a 1.2 percent increase year-over-year.

This article originally published at https://dc.urbanturf.com/articles/blog/starter_home_inventory_steady_in_dc_still_less_affordable/11985


  1. Joseph Seriki said at 3:44 pm on Wednesday December 14, 2016:

    Makes sense for DC because the starter home (I think we mean renovated/rehabbed homes or condos) is what is most most affordable. Once you get outside the starter frame prices get rowdy pretty quickly.

  1. RHM said at 12:07 pm on Wednesday January 11, 2017:

    Nena - Incredibly interesting article.
    One question - how are you defining “Starter Homes”? Are you looking a true single-family (detatched) homes? Or are you including all property types?

    My guess would be that if only looking at single-family homes the inventory would be incredibly low, and only trending lower with non-first time home buyers buying starter homes and renovating them into the “trade-up” housing category.

    Thanks again.

  1. Nena Perry-Brown said at 12:19 pm on Wednesday January 11, 2017:


    Trulia defines a starter home as any housing property that is priced for less than $280,000, including all property types.

    Thanks for reading!

Comments are closed.

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