As more first-time homebuyers are priced out, what can revive the American starter home?

16 comments

1. Higher wages! 💪🤪

2. Creative homebuilding and creative financing. Not everyone needs a starter home that is 2000 sq ft and fully finished. I’m sure that some homebuyers would by a home not completely finished to save money. Maybe a homebuyer would agree to do some final painting or finishing. Do all harwood floors need to be finished. Does every floor need carpet? Does every new house need a garbage disposal and a microwave, a washer and dryer. stove and refrigerator. All those things add to the final cost you have to mortgage.

   Creative financing may involve down payment financing that is handled by an investor rather than the bank. He could finance the down payment at a slightly higher interest rate to allow a homebuyer without a large.downpayment to still fiance a house.

   The third alternative is a used home. Not everyone needs or can afford a brand new starter home. As indicated above the “newness” costs money. There are many used homes that cost way less and just need some TLC.

3. Financing programs: a few FIs that I am aware of will only lend on the secondary market, same FIs have a minimum loan amount between $50k-$80k. Then we can get real demand rolling. The supply side of starter homes also needs work but I don’t have an awnser for that.

4. Fixing the building codes.

5. Building cooperatives that do not allow renting so only people that want to live there will buy one.  

    Not being about to rent them out removes the issue of “investors” and airbnb.  Homes are for living, if you want an investment it should cost more.

   Just make a law that states for every condo or rental building that gets made  a coop of equal size must be made.

6. Make it illegal for LLCs and S corps to hold any single family residences.

   You’re welcome.

7. Creative ways to save cost on building homes and using building space wisely

8. Infrastructure spending. The same thing that kept prices low for decades and decades.

   Gov’t spends money building new cities, this increases the supply faster than the 1% can buy it all up to rent to us, so they go looking for other things to invest in.

   Nothing else is going to work. Except maybe gov’t built housing, but Americans have been trained to associate that with the burnt out “Projects” (nvmd that Reagan & co made sure they were burnt out by pulling funding for jobs programs in the inner cities and selling crack cocaine there too).

9. Normalization of higher interest rates and investment in public schools. Soon as rates come down home sales will climb as will prices. Low interest rates is how we got to the place we are at.

   The majority of homebuyers have families and see their homes as long-term investments. So they seek out the best school districts and prices in various suburbs and communities explode.

   If local govts would invest in schools rather than just endlessly promising tax cuts while relying on vouchers as a solution for better schools everyone wouldn’t be buying into the same neighborhood. People cry that housing isn’t affordable but that isn’t true. Rather it is housing in neighborhoods people find desirable is unaffordable. Fix public education and more neighborhoods become desirable/liveable.

   Keep rates up. When rate are low people are more willing to stretch and pay about asking. It all perpetuates skyrocketing prices. Higher rates forces consumers to be more considerate and careful.

10. Let Evergarnd from China in and let them over build here.

    I kind wish we had 10 million unsold homes or whatever crazy number it is.

11. The destruction of cooperate America

12. Tax breaks for brand new units (homes, town homes, condos) AND commercial real estate conversions to residential.

    Tax breaks need to be time limited 3-5 years with a expiration date

13. What can revive?
    Add incentives to builders and developers to stop building luxury. Issue is, in certain area like NYC, you get a small lot. As a builder or developer, you maximum what you can build, you can spend 4m to sell x unit for 1 million each. Or spend 6-7 mil to sell a few less unit but a luxury price.

    Usually the luxury sales will be far more profitable at the end. This is what you need to target in cities. It needs to come in certain form as tax incentives. Right now it’s just not worth it, I know this, I’m in this trade

    For suburbs, changing the zoning, move it away from town level and allow zoning to be changed at state level. Suddenly, builders don’t need approved from towns to build a complex 30 unit condo. It will increase stock of unit and drive the cost of these one or two family homes

14. Break up the home builders’ monopolies that slow production to drive prices up.

15. Construction of actual starter homes, for one. Nowadays, a starter home is a 50-year-old house that needs $120k in repairs. I live in the Denver area, and all the new construction out here is 3500 sqft homes on 8000 sqft lots. Whatever happened to smaller, affordable homes?

16. Forgive student debt.