US Household Income Needed to Buy Starter Homes Nearly Doubles Since 2019: Realtor

Household income required to purchase a starter home in the United States has risen to $78,000 from $43,000 seven years ago, according to a July 20 report from Realtor.com.  The 80-plus percent increase far outpaces America’s median household income, which grew by 28.3 percent, from $69,000 to $88,100, over the same period.

The report also indicates that compared to June 2019, there are now about 300,000 fewer homes on the market priced under $350,000—reflecting the reduced supply of starter homes. In addition, seven years ago, the average starter home sold for $256,000, compared with the current average of $344,000.

The report shows that in June 2019, 55.1 percent of active listings were priced under $350,000, but that amount has dropped to 37.6 percent today. 

National brokerage Redfin describes starter homes as those priced in the lower third of the local market, often averaging 1,200 square feet, with fewer bedrooms and one or two baths. Depending on geographic location, these properties could be modest single-family homes with a yard, or condos and townhomes. Often, the report notes, starter homes require some renovations.

Realtor.com senior economist Hannah Jones said the starter-home market varies widely by location.

“In the South and West, builders spent the last few years chasing demand at the entry level, and buyers there are actually seeing more choices and better prices than they had two years ago,” she said in the report. “In the Northeast, that construction response never happened—prices kept climbing even as the rest of the housing market cooled.”

In the Northeast, starter home prices have increased 12.6 percent since 2022, to today’s median price of $444,000. Going back to June 2019, Northeast starter homes sold for $296,000. At present, only 29.7 percent of Northeast listings are priced under $350,000.

“The Northeast is the toughest market in the country right now for a first-time buyer,” Jones said. “Limited land, restrictive zoning, and buyers with real financial firepower have combined to push the entry price beyond what most middle-income households can even qualify for.”

Meanwhile, starter homebuyers in the South are seeing median prices of $311,000—a 3.5 percent decline since 2002, but substantially higher than the 2019 median price of $237,000.  

While the West experienced the biggest price cuts, at 7.3 percent, since 2022, starter home prices remain the nation’s highest at $480,000.

The most affordable region, according to the report, is the Midwest, where median starter home prices are holding at $264,000—a 10 percent hike from the 2019 median of $192,000.

While the supply of entry-level homes remains much lower than in 2019, Jones said that inventory priced under $350,000 has grown by 220,000 homes since 2022 and the affordable share of listings has increased by 1.6 percent from last year.

However, the report found that sales of homes under $350,000 declined by about 10 percent in April compared with the same time in 2025 and are down 7.2 percent year to date.

“More listings on the market should mean more sales, but that’s not quite what we’re seeing,” she said, noting that higher mortgage rates could be keeping potential buyers “stuck in place.”

As of July 16, Freddie Mac reported that the average interest rate for a 30-year, fixed-rate mortgage was 6.55 percent, and 5.93 percent for a 15-year mortgage.

The report expects the condition for starter-home buyers to improve only gradually over the next five years as the mortgage lock-in effect fades, more homes become available, and buyer patterns evolve. However, younger, lower-income, first-time buyers who have not built equity are likely to continue facing the greatest hurdles.