If you’re young and thinking about buying a house, someone—possibly your parents—has probably told you to look for a “starter home.”
Starter homes can be any style and in any location, but are typically small, economical houses. Usually having only one or two bedrooms, they often have just enough space for a single owner, a couple, or a small family just starting out. They may be older homes in need of repair, or brand new homes in low-cost developments.
Aside from square footage or their price tag, what really sets them apart is that they are meant to be temporary. The owner may live there for a few years and then move on once their income and/or family grows.
Buying a house that isn’t the ultimate “dream home” that you will stay in forever is often a sensible option for a young first-time homebuyer. The future could include marriage, kids, a pet, a career change, or relocation that will determine where a homeowner eventually wants to settle. A starter home gives the opportunity for homeownership without a huge investment.
According to Market Watch, instead of buying starter homes, a lot of people are opting to wait and save for a bigger, more expensive, “forever” home. But depending on the individual’s situation, that may not be the best or most realistic choice. The purchase price might be way out of their reach for longer than they are willing to wait. And in some regions, buying might make better economic sense than renting. In our article “Is Buying a Home Worth It?” we outline the advantages.