Why Homeowners Who ‘Did Everything Right’ May Be Headed Back to the Starter Home Market

Potential homebuyers seeking their next place to live are no strangers to competition, especially in a market where rates feel stuck above 6%, prices hit record highs, and housing supply is hard to come by. But according to experts, a new type of competition may soon emerge at the bottom of the market, as three different types of buyers start looking at the same sliver of housing stock. And that includes a brand-new buyer segment that likely never expected to be house hunting today. Which of these three buyers comes out ahead won't just come down to who bids the most—it'll come down to who can close the cleanest, fastest deal.A new type of competitionOne-story, low-maintenance, and modestly priced homes have long been sought after by first-time homebuyers, as well as older people looking to downsize, says Ashley Harris, director of homebuyer education at Neighbors Bank. But from her vantage point, she’s seeing new layers of complexity in the competition. “It's not like we're short on houses. We've got plenty of big, older homes that cost a fortune to keep up. What we don't have is that smaller, right-sized home that a first-time buyer or somebody downsizing wants. And a lot of that...