NYC homes affordable to first-time buyers offer less square footage
StreetEasy data shows a typical starter home in NYC today is 9 percent smaller than it was in the summer of 2019. Starter homes in Queens and the Bronx have shrunk the most, by 150 square feet and 208 square feet respectively. Steep increases in mortgage rates and home prices have made it more challenging for buyers to find their first home (see our analysis on the interest rate impact on a homebuyer’s budget). Our data indicates these buyers, who often have smaller budgets, have to compromise on space in order to stay within their budgets.
Typical Starter Homes Are Smaller in Most Boroughs
A starter home is often considered a place where young adults can put down roots with their acquired income and savings after several years of working. In NYC, a starter home typically ranges between $400K and $800K and has at least one bedroom. Indeed, affordability depends on personal income and savings. The $400K-800K range is consistent with the median annual income of young adults in NYC at $83,313, according to the latest data from the Census Bureau, and recent 30-year fixed mortgage rates ranging from 5 percent to 6 percent.
Shrinking starter homes reflect worsening affordability in the city. By August 2022, the median footprint of a typical NYC starter home had shrunk by 90 square feet to 900 square feet – 9 percent smaller than three years ago. Queens, Staten Island, and the Bronx, traditionally considered more affordable, led the decline in median square footage. Regardless of borough, buyers hoping to purchase their first home now must compromise on space to keep within their budget.