||| FROM NPR.ORG ||| (REPRINT AT REQUEST OF ORCASONIAN READER)
America’s roaring real estate boom is leaving millions of would-be homebuyers out in the cold. The problem is most severe in that corner of the market that once propelled the American dream: the small entry-level home.
“I would like to a have a space with a yard, like 900 square feet,” says Mat Pergens, 39, who repairs and installs garage doors in and around Reno, Nev. “Simple cabinets, simple countertops, Shag carpeting. I don’t care. I just want four walls and a roof that I can afford.”
But his aspiration for a modest starter home is completely out of reach. The country is nearly 4 million homes short of demand, according to the mortgage giant Freddie Mac.
Like many American cities, Reno is undergoing a home-buying frenzy, with rapidly escalating prices. Home values in Reno have gone up 27% in the past year. With an influx of affluent Silicon Valley workers driving the market, luxury is trumping affordability.
American dream of a small home with a backyard is on hold
Mat Pergens rests on the grass outside his apartment with his wife, Amanda, and daughter Sylvia. What he really wants is a yard of his own.
Pergens and his wife, Amanda, have a 6-year-old daughter and another child due this month. She stopped working as a pastry chef during the pandemic. They rent a small two-bedroom apartment. “We build all these fancy homes,” Pergens says. “Fancy, fancy houses … and low-income apartments. And there’s absolutely nothing in between.”
So he has put on hold his dream of a small place with some greenery in the backyard where he could build his daughter a treehouse.
That no-frills entry-level home that Pergens describes is just about vanishing in America. Once, it was the steppingstone on a path to upward mobility for a huge swath of younger Americans. In 1982, 40% of the country’s newly constructed houses were entry-level homes. By 2019, the annual share had fallen to around 7%.
With a few brief exceptions, the decline has been as steady as a metronome, says Sam Khater, Freddie Mac’s chief economist. “It’s a huge problem if you think about the fact that home equity accounts for the bulk of wealth for the overwhelming majority of Americans.”
Freddie Mac defines a starter home as 1,400 square feet or less. There’s no universally accepted description, but as a rule of thumb, think two or three smallish bedrooms, one or two bathrooms.
Buying a home isn’t just about gaining a financial foothold, says Anthony Alofsin, an architect and author who has written about the American suburbs. “It’s a sign of arrival. It’s a sign of psychological and emotional security. It has meant a huge deal for this country.”
READ FULL ARTICLE: www.npr.org/2021/09/04/1033585422/the-housing-shortage-is-significant-its-acute-for-small-entry-level-homes
