The average Fresno renter household would need 52% more in annual income to buy a so-called starter home, according to the real estate website Point2.
Fresno renters have an average annual household income of $34,357. To afford a starter home, they would have to earn $72,117 a year.
Point2 says that there are only four large U.S. cities in which renters earn 100% or more of what they need to acquire a starter home. They are Detroit, Tulsa, Memphis, and Oklahoma City.
“Due to the increasing cost of land, as well as zoning restrictions and skyrocketing costs for building materials, the modest, bare-bones homes of yesteryear have become the stuff of myths and legends — the actual unicorns of the real estate market. More elusive than ever, this type of home seems almost extinct,” analyzes Point2.
Scant Starter Home Construction in the US Today
The rapid increase in mortgage rates — from 3.14% a year ago to more than 7% today— as a tool to cool off inflation is also crushing the dreams of homebuyers.
Once upon a time, 70% of all new single-family residential construction was 1,400 square feet or less and the first step on the property ladder for young families. Less than 7% of new construction fits this description today.
Now, a starter home is simply any house priced in the lower third of the market. What’s more, investors and downsizing retirees are competing for these properties.
Read more at this Point2 link.