The ‘Great American Land Rush’ is wiping out the starter home

Starter homes are at a 50-year low. In 2020, only 65,000 entry-level homes were built, despite 2.38 million first-time homebuyers buying that year.

Millennials can barely get their hands on a starter house. Photo: Joe Schmelzer/Getty Images

By Hillary Hoffower

Starter homes are at a 50-year low. In 2020, only 65,000 entry-level homes were built, despite 2.38 million first-time homebuyers buying that year.

Starter homes are running dry, and it’s a big pain for those who need them most — millennials.

The generation, which turns ages 25 to 40 this year, has reached peak age for first-time homeownership. More millennials became homeowners than any other generation in 2020, driving a yearlong housing boom.

But this increased demand from millennials in an era of remote work, coupled with a lumber shortage and the fact that contractors have been underbuilding over the past dozen years, has exacerbated a shrinking housing inventory, with record-high prices for remaining houses.

As bidding wars rife with all-cash offers and higher down payments heat up the market, many millennials face the second housing crisis of their adulthoods.

There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, Daryl Fairweather, chief economist at Redfin…