Starter-home listings up 220000 since 2022 but remain 300000 below 2019 levels

A new Realtor.com report released Monday found 220000 more starter homes listed for sale nationally than four years ago. Prices for these homes fell 4.2 percent over the same period. The inventory crunch for starter homes peaked in 2022.

Starter homes are defined nationally as listings below $350000 or below 80 percent of a local market median list price. Even with the recent gains, the current total sits roughly 300000 below the 2019 count. The typical starter home now carries a nearly $90000 premium over earlier levels.

Qualifying for a starter home now requires a household income of around $78000. That figure stood at $43000 seven years ago. In Phoenix the median asking price reached $489500 as of June, setting the local starter threshold near $391200.

The South recorded the clearest improvement. Its starter-home price threshold dropped 3.5 percent since 2022 to $311000. The share of listings below $350000 rose to 43.6 percent, adding nearly 170000 units compared with the 2022 low.

The West saw its threshold fall 7.3 percent since 2022 to $480000, yet that level remains above the 2019 benchmark of $368000. Only 16.7 percent of current Western listings sit below $350000, a net gain of 23000 units since 2022. The Midwest threshold stands at $263920 after a 10 percent rise since 2022 and a 37 percent increase since 2019.

The share of starter listings there fell from roughly 70 percent in 2019 to 55 percent this spring. The Northeast posted the steepest increase. Its threshold reached $443600, up nearly 50 percent from 2019 and nearly 13 percent from 2022.

Realtor.com senior economist Hannah Jones said dense markets, restrictive zoning, and concentrated high-income demand limit new supply in the region.