It’s getting harder for first-time homebuyers to find suitable starter homes

The Greater Boston housing market has become an increasingly precarious place for first-time homebuyers, according to a detailed new report from Trulia.

In a deep analysis of the nation’s housing stock, Trulia found that starter homes – the affordably priced properties that first-time buyers purchase – have declined considerably in the last four years, while the remaining inventory has become more expensive.

The report’s findings for Greater Boston were:

• The median price for a starter home in Greater Boston is $235,000 in 2016’s first quarter, which is higher than most large metro areas.
• Greater Boston’s starter home inventory, in addition, has declined by 55.6 percent in the last four years, while the median price has risen 23.7 percent.
• Among buyers of starter homes, it requires 50 percent of their income to purchase such a property in Greater Boston, which is actually up 3.1 percentage points from 2012.

The situation was not much prettier on the national stage, where inventory has dropped 43.6 percent and starter homebuyers now need to put down 5.6 percent more of their income – which comes as an addition to the many economic problems of first-time homebuyers already face.

Starter Home Inventory on the Decline

Why has the inventory of starter homes fallen so dramatically? Trulia emphasized two reasons: first, investors  gobbled up thousands of distressed properties during the downturn, and converted them to rentals; and second, millions of homeowners in lower price points remain underwater or near-underwater on their mortgages, and are therefore unable to list their homes.

Here is how Greater Boston’s starter-home market compares with other metro areas: