Guess the median age of a first time home buyer?

38? Wait the f-ck a minute. The average age for someone buying a first home is 38. I need to lie down.

At the very least, I hope these people have been able to afford a nice car!

BTW, the Spritzler Automotive Group is happy to announce that we have been selected to be Chicago's only Koenigsegg dealer. Our new Winnetka showroom will be open in October 2025. In the meantime, please visit our website to pre-order.

https://www.koenigsegg.com/home

American Homes Are Shrinking. Why Are They Still So Unaffordable?

More starter homes are being built, but the situation isn’t a return to the 1950s

By Veronica Dagher, WSJ

May 26, 2025 5:30 am ET

• The median price for a starter home rose to $287,000 in 2024, up by about 44% from 2020, according to Cotality.

• The middle of the previous century was the peak of the starter-home era, when small homes made up about 92% of new construction.

• Buyers who choose starter homes have to contend with high mortgage rates, which drive up monthly costs.

Homes have been getting smaller over the past few years. Why haven’t they been getting more affordable?

Builders have started making more entry-level starter homes, but not tons of them. The small homes they do build are still subject to rising costs for land and labor. Buyers who choose them have to contend with today’s high mortgage rates, which drive up their monthly costs.

Here are four charts that show the challenges:

The middle of the previous century was the peak of the starter-home era, when small homes made up about 92% of new construction. Over the following decades, Americans came to prefer larger homes. People moved out of crowded cities to the suburbs, where land was cheaper and building regulations weren’t so strict. Builders focused on larger, more-expensive homes, which also tended to be more profitable. Today, there aren’t as many starter homes available.

Builders have been focusing more on the starter-home market, particularly over the past few years as high prices and mortgage rates made bigger homes prohibitive for first-time buyers. Since 2017, the median size of new single-family homes has been generally shrinking.

But it is harder for builders to make money on smaller homes. Many of the costs don’t necessarily adjust downward just because the home is smaller, such as the price of the lot or the expenses of getting permits. Many building-material costs have risen by double-digit percentages over the past year, according to Cotality.

While smaller homes tend to be less expensive, prices don’t always fall as fast as square footage.

Colorado Springs, Colo., is an example. Square footage of new-construction homes there fell about 14% in the first quarter versus a year earlier, but the median new-construction listing price dropped only by about 7%, according to Realtor.com, which is operated by News Corp, parent of The Wall Street Journal. That means buyers aren’t necessarily getting a break on the price per square foot of the median home.

The median price for a starter home rose to $287,000 in 2024, up by about 44% from 2020, according to Cotality. During the pandemic, there was a buying rush, and a shortage of available homes drove up prices. Now, mortgage rates are higher as well.

The income needed to qualify for one jumped to $101,376 in 2024 from $49,008 in 2020, according to a National Association of Realtors analysis. Wages have increased over that time, but they generally haven’t kept pace with the steep rise in home prices and mortgage rates.

That means it is taking people longer to save enough money to buy their first home, which is raising the age at which they can buy. Would-be buyers are also being delayed by other burdens on their budgets, such as student loans.

Write to Veronica Dagher at Veronica.Dagher@wsj.com