Is the starter home ‘DEAD’? Gen Z & Millennials can’t buy houses

Added: 2026-06-03

[00:00:00]For decades, the starter home was considered a key part of the American dream. A smaller, more affordable first house that helped people build wealth before moving up to something bigger.

[00:00:11]But now, many millennials and Gen Z buyers say those homes are harder than ever to find or afford. Let's go to Morgan Stevens with the fact check team.

[00:00:21]Times are definitely changing. You can see that in every aspect of the housing market. What does the the data show about the disappearance of a starter home?

[00:00:29]>> Yeah, in many part of the parts of the country, it's really disappearing uh or becoming much rarer uh to find a starter home. In fact, first-time home buyers make up only about a fifth of total buyers in the market. A recent report from the Washington Post found the US has spent decades building fewer small entrylevel homes. Meanwhile, the median home price in the US is now more than $420,000, pricing out many of those firsttime buyers out of the market altogether. And according to Apartment List, the national median rent for a one-bedroom apartment alone is still around $1,500 a month, making it harder for younger people to save for those down payments.

[00:01:11]And also I think an important point is that uh preferences are changing, priorities are changing and maybe the need for that larger space, but you really cannot deny the economic factors, the affordability that we just talked about that factors into this equation.

[00:01:25]>> Yeah, absolutely. So experts say there's many factors kind of colliding all at once here. Uh so that's anything from mortgage rates, student loan debt, inflation, like we talk about uh zoning rules, and those high rental prices.

[00:01:39]Realtor.com found the income needed to buy a median home price starter that that was probably around $86,000.

[00:01:47]But census data shows many millennials and Gen Z workers, they earn far less than that. The median income for American ages 25 to 34 is roughly $60,000 a year. That's just not enough to afford those homes.

[00:02:00]>> All right, Morgan, thank you. In a few minutes, Morgan will join us to discuss what this could mean for the greater housing market and the economy at