Small Homes, Big Opportunity: How Starter Homes Are Making a Comeback

The real estate market is witnessing a notable increase in the availability of starter homes, providing a glimmer of hope for first-time buyers and those seeking affordable housing options. This shift is driven by a combination of factors, including innovative construction methods, legislative initiatives, and adaptive reuse of existing structures.

Innovative Construction Methods

To address the housing shortage and high construction costs, builders are turning to innovative techniques such as factory-built modular homes and 3D printing. Factory-built homes, like those produced by Fading West in Colorado, can be assembled quickly and affordably, offering a potential solution for affordable housing. These homes are built in plants and can be ready for occupancy within six weeks. Similarly, 3D-printed homes, though still in the early stages, promise to cut labor costs and construction time by using robotic arms to construct walls from concrete. While challenges like high equipment costs and regulatory acceptance remain, these methods hold promise for increasing the supply of affordable starter homes.  

Legislative Initiatives

In Minnesota, bipartisan legislation aims to ease the state’s housing crunch by increasing the availability of starter homes. Lawmakers are working to make more homes accessible to first-time buyers, addressing the shortage of affordable housing options. While some local officials express concerns about potential impacts on their communities, these efforts reflect a broader commitment to expanding housing opportunities for residents.  

Adaptive Reuse of Existing Structures

The decline of traditional malls due to the rise of online shopping has opened opportunities for repurposing these spaces into affordable housing. Malls, generally in good structural condition and located with ample parking and transit access, present viable options for redevelopment into residential units. For instance, in Connecticut, the Trumbull Mall has been partially converted into apartments, and plans for the Enfield Mall include a mix of hotels, apartments, and retail spaces. Transforming these underutilized retail spaces into affordable housing could help meet the state’s estimated need for 110,000 new housing units, making areas more affordable and accessible.  

Government Investments

In the United Kingdom, the government has announced a £2 billion investment to build 18,000 social and affordable homes by 2029. Construction is set to begin by March 2027, with significant developments planned in Manchester and Liverpool. This initiative aims to address the housing crisis by providing safe and affordable homes, creating jobs, and boosting the economy.  

Challenges and Outlook

Despite these positive developments, challenges persist. The National Association of Home Builders’ 2025 Priced-Out Analysis reveals that 70% of households (94 million) cannot afford a $400,000 home, while the estimated median price of a new home is around $460,000 in 2025. This underscores the need for continued efforts to make housing more affordable and accessible.  

Overall, the increasing availability of starter homes reflects a multifaceted approach involving innovative construction, legislative action, adaptive reuse, and government investment. While challenges remain, these efforts collectively contribute to a more accommodating market for individuals looking to purchase their first home or downsize to a smaller property.

_{Sources: ctpost.com/search/?action=search&query=Trumbull+Mall+apartments startribune.com/minnesota-lawmakers-plan-to-introduce-bipartisan-housing-bill weforum.org/agenda/2021/12/3d-printed-homes-could-solve-housing-crisis/ nahb.org/advocacy/industry-issues/offsite-construction}