The return of the starter home – or is it?
By : J. David Chapman/May 1, 2025
For generations, the “starter home” was a rite of passage—an attainable first step into homeownership, often modest in size and price but full of promise. Today, that ideal seems to be fading.
In today’s market, what qualifies as a starter home has shifted dramatically. Rising interest rates, labor shortages, and escalating material costs have pushed prices to the point where even small homes are anything but affordable. In central Oklahoma, homes that once sold for $180,000 are now pushing $250,000 or more—well outside the reach of many first-time buyers.
The economics of development are partly to blame. Builders face regulatory hurdles, minimum lot sizes, and design requirements that make smaller, simpler homes less profitable. It’s hard to justify building a 1,200-square-foot home on a 7,000-square-foot lot when zoning and market pressure favor larger footprints and higher price points. Many communities still prioritize large-lot single-family homes, often excluding townhomes, duplexes, or cottages entirely.
There are glimmers of hope. Some developers are exploring cottage courts, infill townhomes, and accessory dwelling units (ADUs) to expand more affordable inventory. Cities are beginning to revisit outdated zoning codes and subdivision rules that make compact, walkable neighborhoods difficult to build. In a few forward-thinking suburbs, you can still find pockets of smaller homes built with first-time buyers in mind. In fact, I attended a city council meeting last night in an Oklahoma suburb where several missing-middle projects were approved. Now the real challenge for the developer is getting them through engineering.
But make no mistake—this isn’t a full-scale return of the starter home. It’s more of a scattered reimagining, a patchwork of progress set against a backdrop of structural challenges.
If we want to restore the path to homeownership for the next generation, we’ll need to rethink how we build and where we allow it. That means embracing flexibility, reducing red tape, and acknowledging that affordability isn’t just about price—it’s about providing choices. A healthy housing market doesn’t offer one product at one price point. It offers a range of options that meet people where they are in life.
The starter home may not be gone forever, but it won’t come back on its own. It will take intentional decisions by planners, developers, and local leaders to fight for a more inclusive and attainable future—one home at a time.
J. David Chapman, Ph.D., is professor of finance & real estate at The University of Central Oklahoma (jchapman7@uco.edu).