My Friends Bought a Starter Home 6 Years Ago — and They May Be Stuck in It for Life

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They want out, but that’s not close to happening. 

In December 2022, the median home sale price was $366,900, according to the National Association of Realtors. And that’s a number a lot of people simply can’t afford. That’s why it’s so common for first-time home buyers to turn to starter homes instead.

A starter home is basically a smaller home — one that might be less updated than some of the other homes you’ll see on the market. Usually, buying a starter home means taking on a smaller mortgage. It can also mean spending less time and money on things like maintenance, since you have less space.

A lot of people who purchase starter homes go in with the intent to stay a few years, build up some home equity and savings, and then upsize when they’re able to. But if you go this route, you may not end up getting to upgrade to a larger home. Just ask two friends of mine who have been in their starter home for six years — and don’t see how they’re ever going to get out of it.

When your plans go awry

My friends Mark and Jenna bought a starter home after having their second child. Prior to that, they were renting a townhouse, and since they were taking on the expense of another child, they wanted to be conservative and keep their housing costs low. Jenna was also taking a year off of work for parental leave, so they were losing her income for a period of time.

Mark and Jenna figured on being in their home for three or four years before upgrading to a larger one. And they’ve been doing their best to save for a larger home since buying their starter home.

But the reason they feel trapped in their current home doesn’t just boil down to today’s higher home prices and mortgage rates. Rather, it stems from the fact they’ve had to pump so much money into their starter home that they’ve barely been able to boost their savings.

Over the past few years, Mark and Jenna have needed to replace their hot water heater, air conditioner, and fence. They’ve also had to do masonry work to correct problems with their sidewalk they didn’t even realize was their responsibility when they bought their home.

And those are just the big projects. They’ve also spent money through the years switching out flooring and carpet (their old floors were in really bad condition, and one carpet even had a funky odor to it), and doing small upgrades, like getting a more efficient washer and dryer — something anyone with young kids needs.

All told, they’ve spent so much money fixing up and maintaining their starter home that they’re in no better a position to buy a larger home now than they were six years ago. And while they could look in a less expensive neighborhood, their kids are enrolled in the local school system and they don’t want to pull them out. So they’re effectively stuck.

Don’t assume you can upgrade

Thankfully, Mark and Jenna’s situation isn’t all bad. They have a three-bedroom home, which is enough bedrooms for their family size (though they’d love an office or play room). And while they don’t have a lot of storage space, they’ve learned to deal with it.

The takeaway here is that if you’re going to buy a starter home, don’t assume you’ll be able to upgrade on your timetable. You may end up in that home longer than expected, so make sure it’s one you can see yourself being happy in should it wind up becoming your forever home.

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