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Buying a starter home can be a smart move. But read on to see why that starter home might accidentally become your forever home. 

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People who are new to homeownership are often advised to purchase starter homes. These homes, which tend to be smaller and less updated by nature, often result in lower mortgage payments, and they commonly require less maintenance. As such, they’re a good option for easing into homeownership.

Of course, finding a starter home isn’t easy these days. Increased land and materials costs have made it more difficult to construct homes in an inexpensive fashion. As such, the supply of entry-level homes has been dwindling and may continue to do so.

But let’s say you do happen to find a starter home. You might assume you’ll stay for a few years and then move on to a larger or more updated home down the line. But here are a few reasons why you instead might end up staying in your starter home for a long time.

1. You’re buying a starter home that needs a ton of work

Starter homes aren’t always the most upgraded. But if you’re buying a home that clearly needs a host of repairs, then you might end up stuck there much longer than expected.

The reason? If you’re forced to spend a ton of money fixing your home up, it might put you in a position where you can’t afford to move for many years. And at that point, you may decide to just stay in your starter home rather than deal with finding a new one after 10 or 15 years.

2. You’re overpaying for your starter home

Because housing inventory is so low, many buyers are raising their bids just to get their offers accepted. But if you overpay for a starter home, you might end up having to stay.

Let’s say you agree to pay $400,000 for a starter home that should really only cost $300,000. What might happen is that the value of that home slowly decreases through the years rather than increases, since it was never really worth $400,000 in the first place. In that case, you might struggle to build home equity, leaving you stuck.

3. You’re buying in a neighborhood that consists largely of starter homes

Some neighborhoods are starter home-heavy. But that might lead to a situation where you end up staying for good.

Once you get used to a given neighborhood, it can become harder to leave. But if there isn’t a larger home in your neighborhood to upgrade to, then you may decide to just stay in your starter home so your kids can have access to the friends and schools they’re already used to.

Staying in a starter home forever is not necessarily a bad thing. It could mean not having to take on a larger mortgage loan and higher costs. But if you’re absolutely certain you don’t want to stay in a starter home forever, then aim to buy a home that doesn’t automatically need a ton of repairs. And also, work with your real estate agent to research home values carefully so you don’t wind up grossly overpaying for your starter home.

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