One mind-blowing chart shows the death of the American starter home over the last 2 decades
- In 2002, more than half of new homes sold for under $200,000.
- In July 2021, less than 2% did, while nearly half sold for over $400,000.
- Homeownership has become increasingly unaffordable for the American middle class, and it's getting worse.
The dream of homeownership has been slipping through the fingers of Americans for decades. The death of the affordable starter home only makes this part of the American Dream more unattainable.
A generation ago, the norm was new houses being sold for under $200,000. Now, houses that cheap have all but vanished from the market.
That chart, using data from the Census bureau's monthly report on new home sales and prices in the US released on Tuesday, shows that while over half of new homes sold in 2002 were priced at under $200,000, only about 2% fell in that range in July 2021. Meanwhile, the share of new homes selling for over $400,000 has steadily risen, with nearly half falling in that bracket last month:
It's worth noting that the above figures are not adjusted for inflation. Going by the Bureau of Labor Statistics' CPI inflation calculator, $200,000 in January 2002 would be worth about $308,000 in July 2021. Still, the average price of a new home in the US has roughly doubled over that period, well outstripping general inflation.
The skew between relatively inexpensive houses and highly priced homes has gotten even worse over the last year amid a wild pandemic-fueled
That same month, Insider's Hillary Hoffower reported that
In the 18 months since, the US has shown signs of a nascent housing bubble. Nationally, prices have been spiking higher, and homes are selling more quickly than they have in years, suggesting a slew of buyers snapping up houses almost as soon as they're listed.
This month, one California homeseller described the current market to Insider's Ben Winck as being "like a game show" in its chaotic, frenzied speed.
Even renters are facing a price crunch, with rents spiking faster than they have in 16 years, according to
It's no secret that Americans have long faced a
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