Starter-Home Squeeze: Where First-Time Buyers Still Find a Foothold

EmitenTrust.com New Realtor.com^® report finds entry-level inventory has thinned nationally since 2019, while Midwest markets still give buyers a meaningful path in

AUSTIN, Texas, Oct. 8, 2026 /PRNewswire/ -- Starter homes are becoming harder to find nationwide, but where buyers look matters as much as what they can afford, according to a new report from Realtor.com.^® Starter-priced listings have become scarcer nationally since 2019, but the Midwest stands out for both inventory and neighborhood choice. The share of active listings priced in the starter-home tier fell from 38.1% in August 2019 to 36.2% in August 2026, even as the national starter-home price threshold rose 30.8%, from roughly $260,000 to $340,000.

The result is a market where entry-level buyers are not just confronting higher prices, but fewer homes that qualify as starter-priced in the first place. Had the starter-home share held at its 2019 level, today's market would have more than 21,000 additional starter-priced homes available to buyers.

"Affordability is only part of the story. What matters as much is whether affordable homes are actually for sale in the places where buyers want and need to live," said Hannah Jones, senior economist, Realtor.com^®. "For first-time buyers, the search is increasingly shaped by the geography of opportunity, not simply a metro's headline price. Keeping homeownership within reach will require more entry-level homes at attainable price points."

Realtor.com^® defines a starter-priced home as one listed at or below 80% of its metro's median list price. The analysis examines active for-sale listings in the 100 largest U.S. metropolitan areas and finds that the national decline in starter-home availability occurred largely during the pandemic-era price run-up: starter-home share had already fallen to 36.3% by August 2022 and has remained nearly flat since.

The Starter Home is Changing

As single-family homes have moved beyond the entry-level tier in many markets, condos and townhomes have taken on a larger role. Condos and townhomes represented 18.0% of national starter-priced inventory in August 2019, compared with 27.1% in August 2026. That shift outpaced the growth of condos and townhomes in the broader market, where their share rose from 16.5% to 20.8% over the same period.

"Condos and townhomes are quietly becoming an increasingly important entry point to homeownership," Jones said. "That does not erase the broader affordability challenge, but it does show that the starter-home market is adapting as single-family homes become less accessible to first-time buyers.This data underscores the need to build all types of housing, a key point raised by the Realtor.com through the industry-wide Let America Build™ campaign."

A Widening Divide Between Metros

The sharpest losses in starter-home share since 2019 are concentrated in Southeast and Sunbelt markets that experienced significant pandemic-era price run-ups. Columbia, S.C. lost 8.3 percentage points of starter-home share, followed by Winston-Salem, N.C. (-7.5 points), Cape Coral-Fort Myers, Fla. (-6.9 points), and Augusta, Ga. (-6.5 points). In Columbia, Cape Coral and Augusta, prices have eased since 2022, but starter inventory has not recovered at the same pace.

At the other end of the spectrum, several markets that began below the national norm gained starter-home share, including Boise, Idaho (+4.7 points), Portland, Ore. (+4.0 points), Des Moines, Iowa (+3.7 points), San Jose, Calif. (+2.9 points), and Denver (+2.5 points). The findings underscore that starter-home access and broad market affordability are not always the same thing.

Affordable Midwest and Rust Belt metros lead the nation in overall starter-home share. Toledo, Ohio, ranks first at 42.1%, followed by St. Louis (40.7%) and Detroit (39.8%). All three have experienced below-average price growth since 2019 and retain a large base of entry-level inventory.

Metro Averages Can Mask Neighborhood-Level Reality

The analysis also finds that starter-home access is often uneven within metros. Across roughly 8,300 ZIP codes analyzed, 18.3% are starter-home dominant, 20.3% are trade-up dominant and 61.4% are mixed. In 81 of the 100 largest metros, mixed ZIP codes make up the majority of the market.

To identify these differences, Realtor.com classified ZIP codes as starter-dominant when at least 60% of listings are priced within the starter tier, trade-up dominant when at least 60% are priced at least 125% of the metro median, and mixed when neither threshold is met.

Austin illustrates how a favorable metro-level picture can still mean geographically constrained choices. The metro's starter-home share is 32.7% and has improved since both 2019 and 2022, but just 12 of its 80 qualifying ZIP codes are starter-dominant, largely clustered in eastern and southeastern parts of the metro. By contrast, 24 ZIP codes are trade-up dominant, concentrated around Lake Travis and West Lake Hills, while 44 are mixed.

"Metro-wide averages are a useful starting point, but they cannot tell a buyer whether they will have choices across neighborhoods or whether affordability is limited to a few specific pockets," Jones said. "Buyers should look beyond the citywide number and consider how starter-priced homes are distributed across the places that fit their lives."

McAllen, Texas, offers a different example. Its 28.8% starter-home share is lower than Austin's, and only one of its 22 qualifying ZIP codes is starter-dominant because the market is broadly and uniformly affordable relative to its own median. More than 85% of McAllen ZIP codes fall within 20% above or below the metro median price.

Charleston, S.C., meanwhile, has one of the most sharply divided price geographies in the analysis. Its starter-home share is 31.7%, but its highest-priced qualifying ZIP has a median price of $6.8 million, nearly 25 times the $277,000 median price in its lowest-priced qualifying ZIP.

The Midwest Offers Price and Choice

When both the share of starter-priced listings and the availability of starter-dominant neighborhoods are considered together, Kansas City, Mo., and St. Louis stand out. Their starter-home shares—37.7% and 40.7%, respectively—are above the national average, and each also has an above-average share of starter-home ZIP codes, giving buyers more distinct neighborhoods to consider.

Toledo and Akron, Ohio, offer the country's highest starter-home shares at 42.1% and 39.3%, respectively, but their affordable inventory is spread across fewer starter-dominant ZIP codes—eight in Toledo and 10 in Akron. Buyers may find ample inventory in these markets, though with a tighter geographic spread.

"Despite a national market that has become less friendly to entry-level buyers, the picture is not uniformly bleak," Jones said. "The Midwest continues to offer something that is increasingly rare: meaningful starter inventory spread across enough neighborhoods to give buyers both affordability and real choice."

Methodology

Data source. All figures are drawn from active for-sale listing data covering single-family homes and condo/townhome/rowhome/co-ops nationwide.

Snapshot periods. Figures represent August 2019, August 2022, and August 2026. Starter home definition. A starter-priced home is one listed at or below 80% of its metro's median list price for that period. A trade-up home is priced above 125% of the metro median. This threshold is relative to each metro's own market, not a fixed national dollar figure.

Zip-level classification. Within each metro, zip codes with at least 50 qualifying listings in the month are classified as starter-dominant (60%+ of listings starter-priced), trade-up-dominant (60%+ trade-up-priced), or mixed/foothold (neither threshold met), measured against that metro's own price benchmark.

Scope. The metro-level analysis covers the 100 largest U.S. metropolitan areas by household count.

About Realtor.com^®

For over 30 years, Realtor.com^® has connected buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 real estate site REALTOR® agents recommend, Realtor.com® delivers consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media Contact: Mallory Micetich, press@realtor.com 

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SOURCE Realtor.com