Starter homes out of reach for most first-time buyers in Idaho and US

There’s no easy start for starting out in the housing market for those seeking to become first-time homeowners, even in the Gem State.

High prices and high interest rates are keeping aspiring first-time buyers from transitioning from renters to owners, according to a recent reports issued by Lending Tree.

The study found that roughly 38%, fewer than four in 10 non-homeowners, can afford a starter home priced at $200,00 nationally. By industry standards, a starter home is classified as smaller and more affordable, typically about 1,500 square feet or less.

Idaho was ranked No. 15 in the study nationally, with an average starter home priced at $300,000. Based on the data, a property of this size in Idaho would require a household monthly income of just over $7,100, and would translate to a mortgage payment of $2,140 including principal and interest.

To determine its findings, Lending Tree analyzed the cost of a starter home in all 50 states and compared it against the average salary for those who don’t own a property. In almost every state, the cost of a starter home was well beyond the median salary of non-homeowners.

“For so many [homeownership] feels completely out of reach,” said Matt Schulz, a Lending Tree chief consumer finance analyst. “It’s a shame because homeownership can be a powerful wealth-building tool and a real stabilizing force for families.”

The report also revealed the median household income necessary for transitioning from renting to owning to be $55,000, about $7,100 short of what is necessary to qualify to make a first-time home purchase.

“It’s safe to say that most people don’t get raises of $7,099 each year,” Shulz said. “That means that bridging the gap might require a side hustle, a second job or other sacrifices.”

Those who desire to own their first home may have to head south, with Mississippi (62%), West Virginia (58%) and Arkansas and Alabama, both at 54%, ranking as the most affordable states for first-time buyers. Other affordable states for owning a first home include North Dakota, Kansas, Kentucky, Oklahoma and Louisiana.

On the flip side, Rhode Island was found to be the least affordable state for first-time buyers, followed by Utah and Hawaii. The Aloha State also joins California, Colorado and Massachusetts as states with a median starter home cost of $400,00 or above, double the national average.