Has the Term ‘Starter Home’ Become Outdated?

By Melissa Dittmann Tracey

The traditional “starter home”—once the classic first step on the path to homeownership—may be getting redefined. A new study from Renuity Home finds that nearly half of first-time buyers are skipping the starter home entirely, opting instead for properties that better fit their longer term needs.

Rising home prices, limited inventory and shifting priorities are reshaping how buyers approach their first purchase.

Why First-Time Buyers Are Skipping Starter Homes

The Renuity study shows that many first-time buyers bypassed a traditional starter home because they found entry-level homes either priced too high, in short supply or too quickly snapped up by investors. Among those who did purchase a starter home, compromises were common—older properties, smaller spaces,or less-than-ideal locations.

The key reasons for skipping the starter home, according to the survey of 1,000 Americans who purchased their first home in the last five years:

• Prices were too high for starter homes: 34%
• Didn’t want to outgrow it quickly: 32%
• Qualified for more than expected: 31%
• Saw it as a better long-term investment to skip: 26%
• No starter homes available: 23%
• Never intended to follow the traditional path: 22%
• Received financial help to afford more: 20%

Shifting Priorities and Household Composition

Affordability pressures, delayed life milestones and changing generational priorities are prompting buyers to rethink the “starter home” concept. First-time buyers today are wealthier and older than previous generations, with a median household income of about $97,000 in 2024 and an average age of 38—an all-time high, according to National Association of REALTORS® data.

Homeownership as a family milestone appears to be declining. Only 18% of Gen Z buyers and 17% of millennials purchased with plans for a family or future with a partner. Meanwhile, single buyers—particularly single women—are increasingly shaping the market. The share of first-time buyers who are single women has grown from 11% in 1985 to 24% in 2024, compared with 11% for men. Many are making strategic choices to ensure stability, such as buying multigenerational homes or prioritizing proximity to family.

Buying for the Long Term

First-time buyers are prioritizing flexibility and long-term value. Nearly 60% say their home mostly met expectations, and 24% say it exceeded them. They cited better condition, larger size, improved layout and stronger neighborhoods as reasons why the home they bought exceeded their expectations. About 26% reported needing more repairs than anticipated, yet many first-time buyers reported opting for “good enough” homes with plans to invest in upgrades over time.

Ownership timelines are lengthening. According to NAR’s 2024 Home Buyers and Sellers report, the median number of years a seller owned their home is 10, up from six years between 2000–2008. Elevated mortgage rates and limited inventory may be extending these timelines: roughly 57% of first-time buyers plan to stay in their first home for six or more years, with women slightly more likely to say they plan to remain indefinitely.

The Evolving Starter Home

The “starter home” isn’t disappearing, but it could be evolving. Buyers are navigating affordability, timing and lifestyle needs strategically, placing long-term value and flexibility above tradition.

Homeownership remains a key goal: 45% of respondents say they’re glad they bought, and nearly a third would make no changes if purchasing again. But first-time buyers may no longer want a home they’ll quickly outgrow or view as temporary. Instead, they’re seeking a place to stay, invest in and call home for the long haul. When they buy, they may want to buy for keeps.

Return to Blog