The shift is visible in the size of what gets built. New homes have grown steadily larger for decades. By 2022, houses with four or more bedrooms accounted for nearly half of all new construction, compared with roughly one-fifth in the 1970s. Larger homes come with higher prices, and those prices have climbed quickly. The national median home price now sits above $410,000, nearly $100,000 higher than just a few years ago.
It is tempting to attribute this trend to changing consumer tastes, but the article points to more structural causes. Builders respond to the financial and regulatory environment cities create. Minimum lot sizes, setback requirements, parking mandates, and other local rules often make small homes difficult to build legally, let alone profitably. After the Great Recession, many builders also shifted toward higher-margin projects to reduce risk, reinforcing a preference for larger houses aimed at wealthier buyers.
The result is that the traditional starter home—a roughly 1,000-square-foot house on a modest lot—has become financially implausible in many markets. Even when builders want to offer smaller units, land costs and zoning constraints push them toward higher price points. In cities that prohibit building on small lots or limit the number of units per parcel, there is little room to experiment.
High-cost metros illustrate the problem most clearly. In Washington, D.C., where the median home price approaches $700,000, even households with solid professional incomes struggle to find homes that function as an entry point. Smaller or older properties do exist, but they are scarce, often require significant compromises, and routinely draw multiple competing bids, including from investors.
The Washington Post also documents how modern expectations add to the cost. New homes are far more likely to include multiple bathrooms, larger garages, and upgraded finishes than their mid-century counterparts. These features are not inherently problematic, but when they become the default, they eliminate lower-cost options from the market entirely.
There are signs of modest adjustment. As mortgage rates rose sharply beginning in 2022, some builders began producing smaller homes in an effort to keep monthly payments within reach. Census data show slight increases in the share of new homes under 1,800 square feet, alongside declines at the very large end of the market. Still, the article underscores that these changes have not meaningfully restored affordability, particularly in jurisdictions that restrict lot sizes and housing types.
New construction is only part of the picture. Existing homeowners with low mortgage rates are staying put, reducing turnover. This “lock-in” effect is strongest among higher-priced homes, but it tightens inventory across the board and makes entry even harder for first-time buyers. While lower-priced homes are still selling more readily than mid- or high-tier properties, the overall supply remains constrained.
Where the story becomes most relevant for city leaders is in its discussion of policy responses. Several cities and states are experimenting with reforms designed to make smaller homes legal again. Minneapolis, Salt Lake City and St. Louis have all moved to relax lot-size requirements or other land-use rules. States such as Arizona, Utah, Texas, and Colorado are exploring ways to encourage the production of smaller, more attainable homes.
These efforts share a common insight: housing affordability is shaped locally. Allowing homes on smaller lots, legalizing multifamily or “missing middle” housing, reducing mandatory parking, and easing conversion of existing buildings can all lower per-unit costs without requiring new subsidies. In older neighborhoods, subdividing large houses or converting rowhouses into multiple ownership units may offer one of the fastest paths to new entry-level supply.
The personal accounts in the article highlight what is at stake. Households that once expected to buy a starter home in their twenties now find themselves planning a “first” home in their late thirties, often assuming it will double as their forever home. That shift affects family formation, labor mobility, and long-term wealth accumulation.
The lesson for cities is not subtle. Starter homes did not disappear because buyers stopped wanting them. They disappeared because local rules and market incentives made them illegal or uneconomic to build. Reversing that trend will require zoning reform that allows smaller, simpler housing in more places. Without it, the first rung of homeownership will remain out of reach for many households cities say they want to keep.
