It may sound as if it’s all fun and games, but half of all households in the country don’t earn enough money to buy a simple starter home. To afford a median-priced starter house, would-be buyers need to earn almost $80,000 a year, according to Redfin. Yet Census Bureau data shows 50.1% of households earn $75,000 or less. 

A typical starter home usually has one or two bedrooms. In another time, it may have had three and was probably around 1,200 square feet. They aren’t always in the perfect neighborhood or city, but they are more affordable than a mid-tier home. The crucial point is starter homes are hardly even starter homes anymore. How much home people can buy keeps dwindling, and it seems as though it’ll continue to do so for some time. Unfortunately, this poses a problem apart from simply finding a place to live. Real estate is the way a lot of typical Americans build wealth; they buy one small house, it appreciates, they build equity, and then they sell and buy a bigger one. Each time, they move up in terms of personal wealth, but that is much harder to do today—and nearly impossible for large swaths of millennial and Gen Z buyers.

“Americans need to earn more than a year ago—and much more than before the pandemic—to afford a starter home because mortgage rates are elevated, and home prices are near record highs,” the analysis stated. Last month, mortgage rates averaged 6.85%, much lower than in the spring, but a far cry from the pandemic lows; and the typical starter home sold for $250,000, a record high. Gone are the days of $200,000 starter homes. 

Because housing affordability is so strained, households that could have previously afforded more than a starter home, have lost ground. “Rising prices have pushed many middle-income Americans to buy starter homes, and pushed many lower-income households out of the market altogether,” Redfin said. 

Later in the analysis, it said: “Starter homes are a hot commodity; lower-income families, middle-income families, and investors are all vying for them.” The author cited pending starter home sales, which rose 10% last month compared with a year earlier between increasing interest and inventory. So it’s become easier to find a starter home but harder to afford one. 

“There are neighborhoods here that are both desirable and affordable, with homes selling in the $150,000 to $350,000 range. But first-time buyers are struggling because those homes typically get at least five offers,” a Redfin Premier agent in Milwaukee said in the report. In Milwaukee, the median starter home price is $195,000.

“I recently listed a house for $210,000,” the Milwaukee agent noted, “and it received several bids, one of which included an offer to buy the seller pizza every Friday night until the deal closed. We ended up going with a higher offer, but that’s an example of the creativity we’re seeing as buyers compete for starter homes.” 

In half of the 50 most populous metropolitan areas, a family earning the local median income can’t afford to buy a starter home, according to Redfin’s estimates. Consider parts of Southern California, where families need to make substantially more than the estimated local income to buy a starter home. In Los Angeles, the median income is around $93,000, per Redfin. The real estate brokerage firm’s data differs slightly from that of the Census Bureau, which lists the median household income in Los Angeles County at around $82,500. All told, an L.A. household needs to earn close to $185,000 to afford a typical starter home valued at $650,000. 

In Northern California, Redfin’s estimated median incomes are higher, and still not nearly enough to match what is needed to afford a typical starter home. In San Jose, the median price for a starter home is $970,000, and the median income is around $170,000 per Redfin. Census Bureau data shows it’s close to $155,000 for the San Jose, Santa Clara County area. Meanwhile, the income that’s needed to buy a starter home is more than $299,000.

“Homes in the Bay Area are so expensive that even many high-earning tech employees have been priced out of the area, so they’re looking at neighboring cities,” a Redfin agent in the San Jose area said in the analysis. “I have one client who wanted to buy in Palo Alto, but they can’t afford it anymore so they’re looking in Sunnyvale and Santa Clara. That’s pricing out a lot of lower earners in those neighboring cities completely.”

The implication of that is scary, even if it’s nothing new. And in an election year, in the midst of a housing crisis, it’s something to watch considering the two candidates’ very different policy proposals and commentary on housing. 

“Both Kamala Harris and Donald Trump have promised to make homeownership more affordable, but only Harris has signaled that housing is a top priority,” Redfin chief economist Daryl Fairweather said in the analysis. “Her plan to build 3 million new homes could make starter homes more affordable for the average American family.”

She continued: “One pathway Harris has suggested for accomplishing that goal is through incentives to local governments and subsidies for builders of affordable housing. That could help battle the severe starter home shortage, particularly in expensive coastal markets.”