Despite soaring prices, the rate of people becoming first-time homebuyers is going up.
According to fresh findings from Redfin, pending starter home sales were up 10.2% in July when compared to the same time in 2023.
The real estate company defined a starter home as a residential property with a sale price that fell into the 5th-35th percentile.
From May to July of this year, Detroit saw the biggest increase in starter home sale prices, while Seattle starter homes sold the fastest, with a median of just seven days.
The rise in sales is not correlated with a drop in prices for such homes, however. The median price for a US starter home rose above $250,000 this summer.
“The overall market remains sluggish, but we are beginning to see first-time homebuyers come off the sidelines, buoyed by falling mortgage rates and an increased number of homes hitting the market,” Redfin Senior Economist Sheharyar Bokhari stated in the company’s new report, published this week.
adding that “More buyers means more sales, but so far we aren’t seeing prices skyrocket, because the rising number of homes hitting the market is enough to satisfy the increased demand — a positive outcome for both buyers and sellers.”
San Antonio-based Redfin Premiere agent Derrell Skillman further noted that, currently, younger buyers shopping for starter homes “don’t want a big backyard and a pool, they just want something efficient, with minimal ongoing maintenance required.”
Significantly a result of this preference, “lower-priced homes are really moving right now, especially since rates went down to around 6.5%” Skillman said.