Someone Asked, 'Why Are More And More People Buying Forever Homes As Their First?' The Answers Say A Lot About How The Market Has Changed

Someone on Reddit recently asked, “Why are more and more people buying forever homes as their first?” The question, posted in the popular r/MiddleClassFinance subreddit, hit a nerve and sparked almost a thousand comments.

Turns out, the answers reveal just how much the home-buying process has shifted in the past couple of decades.

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Starter Homes Are Disappearing

One of the most common replies pointed to a basic supply problem. “Starter homes are basically as expensive as forever ones,” one commenter wrote. Another added, “Most developers have said starter homes are not profitable to build.”

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Smaller, more affordable houses are being torn down or never built at all. “My home is a starter home but a lot of the other starter homes in the neighborhood have been torn down and something much, much bigger replaced it,” one person shared.

That competition is now happening at jaw-dropping price points. According to Realtor.com, 28 states have at least one city where the median price for a starter home, defined as a home priced at or below 80% of the area's median, is around $1 million. That means that in some regions, the idea of a starter home is no longer realistic. California has the most cities with expensive starter homes, and in Massachusetts, 40.9% of cities have starter home prices over the million-dollar mark.

People Are Buying Later In Life

According to ResiClub, the median age of first-time homebuyers has jumped from 28 in 1991 to 38 in 2024. By that age, many people are well into their careers and might already have families. That makes skipping the small starter and going straight for a larger, long-term home more practical.

“By the time they’re buying, they have more money, [and are] more established in their careers,” one person wrote.

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Low Mortgage Rates Have Locked People In

Many buyers scored very low mortgage rates before 2022 and are now reluctant to move. “Even with the equity we have, combined with interest rates, there’s no way we could afford to upgrade,” one user shared. Another echoed that: “Look into how much it costs to move from a 3% interest rate to a 7% interest rate, even if you are moving into a home of the exact same value.”

As a result, many have decided to stay put and invest in their current homes instead. “We're just popping the top off and building a second story,” someone said. “We can use our house for a [home equity line of credit] if needed, but don't have to change our home interest rate.”

Several pointed out the transaction fees involved in buying and selling. “‘Upgrade every five years’ is nuts. You pay 7% in real estate fees every time you sell. That’s how you get to be 50 and have no equity in your home,” one person noted. 

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Forever Home Or Just Making It Work?

A few people admitted that they didn't mean to buy their forever home—it just worked out that way. “We've since had three kids and have outgrown this house,” one said. “But we're not moving anytime soon. Houses in my neighborhood cost double what we paid… there's no way we could afford to upgrade.”

One long-time real estate professional chimed in to challenge the whole concept. “There’s no such thing as a forever home for most people. Unless you are at least in your mid to late 50s and nearing retirement and your kids are gone, investing money with the idea that you'll stay there ‘forever’ is an unrealistic and dangerous plan,” they said. “Life is unpredictable.”

Still, the comments painted an unmistakable picture: fewer people are moving often, and more are making their first home purchase a long-term decision out of necessity.

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