Jun 9, 2024 - Real Estate

Denver starter homes turning into forever homes

A line chart that displays the quarterly share of first-time homebuyer mortgage applications from Q1 2021 to Q1 2024. The share starts at 11.56% in Q1 2021, peaks at 27.53% in Q1 2024, with noticeable increases in Q2 2021 and Q2 2022. The chart shows a general upward trend over the period.
Data: Maxwell; Note: Analysis comes from 300+ U.S. lenders; Chart: Axios Visuals

New buyers aren't the only ones frustrated by the Mile High City's market. Existing homeowners stuck in close quarters are feeling the squeeze, too.

Why it matters: Your starter home could become your forever home.

Zoom in: Leah Foreman and her husband bought a three-bed two-bath Lakewood home in 2020. She's had a baby since then, and they're already outgrowing the house, she says.

  • The living room is their home office by day, and they're constantly purging and donating to Ridwell.

What they're saying: A bigger house isn't an option right now. "We wouldn't be able to afford to rebuy our current space. How would we move?" Foreman tells us.

The big picture: First-time homebuyers are taking up a growing share of home purchases while current owners stay put.

  • Half of potential sellers are waiting for mortgage rates to come down before they list, per Realtor.com.
  • Roughly one-third of potential sellers have been thinking of moving for multiple years.

Shamika Lynch of Maximizing Tiny Interiors specializes in small-space design. There's been a noticeable increase in clients opting to renovate the space they have instead of upgrading to a larger home, she says.

  • To maximize minimal square footage, clients are packing multiple functions in each space. For example, one client is adding a bathroom to their existing layout to complete a guest suite (that may double as a nursery one day), Lynch says.

The intrigue: U.S. homes are getting smaller, as households shrink, people have kids later in life and housing costs soar, Axios' April Rubin reports.

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