Discover How Pennsylvania Compares to Other States in Finding a Starter Home

The elusive American dream of affordable homeownership often starts with a manageable starter home. These properties allow young families and adults to lay the foundation for financial security, build equity, and establish roots. However, finding affordable starter homes in the U.S. has become a challenge due to low inventory and significant affordability hurdles.

Finding Affordable Starter Homes amidst Changes in Home Values and Household Income

Over time, the disparities in the growth rates of home values and household incomes have contributed to the housing affordability crisis in the U.S. Between 2000 and 2022, inflation-adjusted median home value increased by 59.1%, while the median household income saw a meager rise of just 4.5%.

A Decline in the Construction of Single-Family Homes for Sale

For first-time homebuyers, supply constraints pose another challenge. The U.S. housing market is grappling with a shortage of smaller, more affordable homes that were commonplace a few decades ago. The percentage of single-family homes with one or two bedrooms built in the mid-1980s was 24%, but by 2022, this number had dropped to just 5%.

Geographical Disparities in the Starter Home Buying Environment

The sharp decline in the construction of starter-size homes is particularly evident in the northern parts of the Great Plains and Mountain West. These regions, less populated than their counterparts on the East or West Coast, have a below-average share of starter-size homes (compared to the national average of 67.7%).

Affordability also varies significantly across different regions. Some of the most competitive U.S. real estate markets are located in the western states, where above-average mortgage costs relative to income are common. But affordable starter homes can still be found in the Midwest and South regions.

Identifying the Best Places to Buy a Starter Home in the U.S.

To help new homebuyers identify the best places to find a starter home, Construction Coverage researchers calculated a composite score based on factors like the percentage of homes with three or fewer bedrooms, median sale price of such homes, and homeownership rate for under-35 households.

In Pennsylvania, for instance, the composite score is 56.6 with 69.0% of homes being starter-size, and the median sale price of these homes is $233,994. Compared to the U.S. average, Pennsylvania offers a slightly more affordable environment for first-time buyers.

For a detailed methodology and more information, check out The Best U.S. Cities to Find a Starter Home on Construction Coverage.