I Hate Starter Homes

When did it become uncool for a start home to be a forever home?

You know what really grinds my gears? Starter homes. Those “2 bedroom 1 bathroom homes perfect for starting a family!” It’s not that these houses are inherently bad. There’s nothing especially repulsive about them.

And it’s not the house itself that I hate. It’s the term. This subliminal marketing that says “Eh, it’s a nice home for NOW, but you NEED something better. After all, this is just for starters, later you should get something bigger and better.”

This thought that all families must expand, and everyone wants more space is just false.

Non-Expanding Families

At least here in America we’re obsessed, in general, with more space. Many construction companies will flat out turn down projects to build homes under 2000 square feet. In some areas, it’s even a higher lower-bound.

And that can be a problem when a young couple, who isn’t going to have children, is looking to build. Kristin and I for sure got more space than we needed in our house. Sure, having the extra rooms will be nice for guests. But it comes at the cost of higher utility bills, more stuff to clean, and more furniture to eventually buy.

(For the record, we decided to build for a number of reasons including neighborhood [Hi Neighbors!], and the fact that we didn’t want to renovate but still wanted the nice finishes. We know it was more expensive but it’s a cost we’re willing to pay since we’ll still hit our goals. At the end of the day, it’s about doing what’s right for you.)

Making Smaller Spaces Work

Since we’re obsessed with space, there’s this thought that having ONLY 2 or 3 bedrooms is a bad thing and can’t support a family long-term. My mom and her family is a shining example of that just being false:

The house I grew up in with six kids and two parental units was technically a 3 bedroom, 1 bath house built in 1959.Β  It has a small family room behind the garage that my folks transformed into a fourth bedroom but it didn’t have a closet.Β  That was my mom and dad’s room and they bought a free-standing wardrobe for their closet.

Guess they were well ahead of their times as you could call that a split bedroom set up (away from us kids in the other three bedrooms).Β  I just looked it up on Zillow and it is 1135 sq. ft.Β  And we survived to talk about it!

1135 square feet for 8 people! And today Kristin and I have more than double that amount for just two adults. Admittedly we love our space, but clearly the trend over the years has been for bigger houses.

Starters Can Be Forever

When did “starter homes” become cool, and “forever homes” became something totally different? Why can’t these two be the same??

Kristin and I never intend on moving – we’re planning on being in our house basically forever. Our home doesn’t fit the definition of a starter home despite being our first, and only home. We will never outgrow it from a space perspective. Unless our jobs take us elsewhere, we’ll stick in the area.

Warren Buffett still lives in the same house he purchased for just over $31k in the late 50’s (about $250k adjusted for inflation). As one of the richest people in the world, he could have any house he wants. And yet he is content with his “starter home” because it has served his needs.

And that’s really what it’s about – a home that serves your needs. If those needs change over time, and your house no longer works for you, then you can change your plans. Three great ways to do it?

  1. If you outgrow it, turn it into an investment property
  2. In the future, downsize instead of upsize (works really well for small families or single people)
  3. Add onto the home if you need a bit more space

But the option we’re going with? Make it our forever home by paying off the mortgage and living there forever.

Plans Change

And who knows, maybe we’ll downsize when we become old farts that can’t walk up the stairs anymore because of our bad knees (thanks, Mom). Maybe we’ll get sick of the cleaning and yard-work, and opt for something smaller.

Plans can change, and most likely will. We’ll roll with the punches.

Question:

What are your thoughts on starter homes and the trend of bigger houses (tiny house movement excluded)?

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27 Comments

  1. Congrats on your new home purchase! To answer your question, I personally don’t have any qualms about starter homes. The concept of buying a home that you can afford, pay the mortgage, build equity, and then upgrade, doesn’t sound too bad. I bought my first home in 2009 for $90k, which was the most I could afford at that time. I was content with making that my forever home! But life happened, now that home is rental property, and I live in a different city. I can appreciate the frustration with the current market in most areas, where there is a limited supply of *affordable* starter homes.
    Now, to answer the second part of the question. I think the trend for bigger homes is prevalent, but it doesn’t bode well with increasing home values. If we have another market correction that drives down home values, I think people that are waiting on the sidelines will jump at the opportunity to buy a *bigger* home.

    1. See and here’s where I find the difference: “I was content with making that my forever home!” – That’s no the case always and it seems like, at least realtors, will try to get you into this mind-set of not being content with buying a forever home until you’re 60!

      And yeah there will definitely be folks waiting on the sidelines. There always seem to be

      Thanks for weighing in with your thoughts, I love reading what people think about different things!

      1. Confession-I totally had the mindset of “I can upgrade later, when I make more money.” But that quickly changed after a co-worker introduced me to Dave Ramsey. I can honestly say that I developed a since of being content with my home after gaining financial literacy.

    1. The nice thing is that even though our home is about 2500 sq ft, since we don’t regularly use all of it we’re only cleaning about 1400 or so which isn’t too bad. We normally do it while we meal prep as well, so it’s not so bad!

      The yard is another story πŸ™‚

  2. So this may seem like a left field comment πŸ™‚- but even as a kid, I wanted a smaller home. My family was frugal and we lived on a sizeable farm, so firewood was our main source of heat. Do you know how much work it takes to heat a 3 story log home?? It’s a lot! Add in all that cleaning for one adult and three children (my father passed away) and suddenly it’s just more work than it’s worth. I love a little space, it’s cozy, it’s Cost (and effort) effective, and really, it just seems to make more sense this way. Oftentimes I think we all forget where we come from, it’s easy to forget that for thousands of years, entire families lived much closer together, and all this extra stuff, really is just extra. Kudos to you and your wife for your commitment to your home, and thank you so much for this post, it’s a good reminder for all of us.

    1. For sure! I never really wanted a big home nor a small home growing up – what we had was always sufficient. I never thought too much about the actual work it takes until I moved into an apartment on my own.

      Knowing you’d want a smaller home when you were a kid makes me chuckle!! I guess if you had to help out a lot around the house and bring wood in to heat a big home I can see how that’d wear you down a bit!!

      Thanks for reading and commenting!

  3. “Modest” 6,000 sq ft home….Still kind of a big house.

    I think starter homes might be a construct of the national association of Realtors in order to get you to buy something that is less than you really want. Its all about that commission…. otherwise people might just rent till they have enough to buy what they really want.

    1. That’s definitely a compelling argument and would make sense. The National Association of Realtors has been around for quite a bit longer than the term Starter Home though – but I wouldn’t be surprised if they were a big factor in pushing the term to popularity shortly after WW2.

      Thanks for weighing in!

  4. I’m still in my starter home 40 years later. We expanded it quite a bit but did it mostly via cash flow and paid it off a long time ago. Its far too large with the three kids grown but why downsize? We certainly don’t need any extra money to finance our continuing early retirement and so we just don’t use about half the house. Utilities are higher than a smaller place but that’s insignificant money. Because we have a whole empty upstairs we sometimes take a younger person in for nearly free rent if they have a compelling story and have “adopted” a couple of extra daughters that way. Having too much space is far less of a problem than being crammed into too little space with a large family.

    1. Oh that’s super cool! If it’s all paid off and you guys are comfortable, you’re right – no reason to downsize really. Extra “adopted” family members seems like it’d be personally rewarding, too

  5. I have to respectfully disagree on this one. For the subset of people who remain single or don’t want children you may be right, but for the average family a starter home really is a starter home. A 1,200 sq. ft. 2 bedroom is not going to be practical for a family with children. I know from experience living in an 1,100 sq. ft. 2 bedroom apartment with only 1 child. You don’t need to constantly trade up until you’re in an 8,000 square foot mansion but even 1,800 sq. ft. 3 bedroom is going to be tight with a family with 2 children. If all your extended family is out of town you’ll want space for them to come visit, if you have a boy and girl they can only share a room for so long before that isn’t practical. No matter how hard you fight the consumerism the reality is kids come with a lot of stuff which means storage space/closets.
    Just because your parents/grandparents lived in a small space doesn’t mean you should/have to. Isn’t the point of working hard to be successful so you can provide a better life for your family than the previous generation? I would love for the first house we buy to be our forever home but given housing prices and my current income that just isn’t possible. Why is it inherently bad to buy a place that we can afford today and then move into a house that fits our needs better when we have more income and some home equity? Seems like a better option than stretching to buy our forever home right now and being trapped by a massive monthly mortgage payment.

    1. ” Isn’t the point of working hard to be successful so you can provide a better life for your family than the previous generation? ” Yep – when you can do it and not negatively impact your future. I guess I should specify: I don’t have a problem with anyone upgrading to a home they can truly afford should their needs say ‘yeah, this is probably a good move’. But by and large that doesn’t seem to necessarily be the message I hear from folks like RE agents who call things starter homes. Especially after talking with Kristin and I even though we said we don’t want kids…like, why would we ever outgrow our home?

      I think the key element here is the word “afford”. I didn’t include that or describe my stance in detail in the original post so that probably got lost in the message I actually sent. πŸ™‚

      Appreciate your input on this! Thanks!

  6. Couldn’t agree more! The perpetual upgrade message is pervasive these days. And it seems to apply to every aspect of our lives – wardrobe, cars, houses, etc. As far as homes go, bigger isn’t always better. Factor in the cost of moving every few years in pursuit of bigger and better and most people are just spinning their wheels and will never get ahead!

    1. Yeah especially when you factor in that many people just move mortgage to mortgage….they might want to buy to save money but if they’re carrying a mortgage and upgrading along the way they’re basically never going to pay it off!

      At least it’s not like in some areas like Japan where people are taking out 100-year mortgages and barely building any equity at all! Ick…

      Thanks for reading and commenting!

  7. We fell into the starter home trap. It was just something that I thought was needed and you can get something nicer later. Thankfully we do like our house enough to keep it and stay in forever or like you said, as an rental. But honestly, as much as I love my house – we would have decided on something different if I knew it was 100% we will be staying for 30 years+.

  8. Our first home was a starter home, we didn’t intend to stay there forever but that is all we could afford at the time. Looking back, I wish we didn’t feel the pressure to buy a house then and just rented until we were ready to buy our dream home. It would have made a lot more sense.

    1. That’s too bad, but exactly what I’m talking about! I suppose that the ‘right house is the one you can afford’ but at the same time if it doesn’t suit your needs and you felt pressured into it, it kinda feels like the wrong move I’d imagine.

  9. Great points Dave! Let’s take a stab at renaming starter homes (for fun of course)… How about “homes for poor people who happen to be young” Hovels? How about stage A homes? No? Well why not? Because you’re right! It’s all marketing.

    Congratulations on your home. I agree with you, why pay for extra space you don’t need? Why make people feel bad or pressure them into children.

    Ever since I started the FI path I’ve been inching in this direction. Gone are my dreams of big garages and fancy homes. Now I just want enough to let me live on my own terms.

  10. We have lived in our home for almost 36 years. Raised two boys and for the past 13 summers, have housed 2 ‘adopted’ sons. We have 3 bedrooms, 1 3/4 bathrooms (shower only in the bathroom off of the ‘master’), a large living room and an adequate kitchen/dining area-all on 1/3 of an – about 1600 sq. ft total. Although I wouldn’t mind a smaller lot/smaller house for ease of maintenance as we get older, the hubby considers this his forever home. (seeing as he built it, I understand why). Could we have moved when our income increased? Probably. But we paid off the mortgage in 15 years, so why burden ourselves with new debt.

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