The financial barrier to purchasing a starter home in the United States has increased significantly over the past seven years. According to a July 20, 2026, Realtor.com report, the income needed to afford a typical starter home has jumped more than 80% since 2019, rising from roughly $43,000 to about $78,000 annually. This increase has outpaced wage growth, leaving many first-time buyers struggling to enter the housing market.

"First-time buyers aren't sitting on the sidelines because they don't want to own a home—it's because, for many of them, it's just not possible right now," said Hannah Jones, senior economist at Realtor.com, in an interview with Fox News Digital.

While the supply of starter homes has slowly improved since the pandemic housing crunch, elevated mortgage rates, higher home prices, and a shortage of affordable listings continue to keep many prospective homeowners from purchasing. A wave of new construction has fueled the strongest recovery in starter-home inventory across the South and West, with buyers in these regions seeing more homes within their price range. In contrast, much of the Northeast faces rising prices and limited supply, and the Midwest remains relatively affordable compared with other parts of the country.

Starter-home prices have fallen 7.3% from their 2022 peak, led by markets such as Denver, Phoenix, and Colorado Springs. Despite this, Realtor.com found that purchases of homes priced below $350,000 fell about 10% in April 2026 compared with a year earlier, indicating that higher borrowing costs—not just limited supply—are major obstacles for would-be homeowners.

Housing experts emphasize that expanding homebuilding is one of the most effective ways to improve affordability.

Sources

Notable Quotes

  • "First-time buyers aren't sitting on the sidelines because they don't want to own a home—it's because, for many of them, it's just not possible right now." — Hannah Jones, Realtor.com
  • "Buyers in parts of the South and West are seeing more homes in their price range, while much of the Midwest remains relatively affordable compared with the rest of the country."