April 26th, 2022

Starter or Forever: Which Home is Better?

Despite the delay in first-time home buying amongst the millennial generation, largely seen as a result of the effects of the Great Recession and high student loan debts, millennials now represent 37% of the total national home buying market[1]. More than half of those buyers represented first-time home purchasers between July 2019 and July 2020[2].

As denim jean trends changed, so did the home buying trends amongst the younger generation. While the boomers traditionally entered the real estate market into “starter” homes and eventually moved into larger properties, millennials are increasingly skipping the “starter” homes for their forever homes[3]. The decision to go with a starter or forever home is a personal one that will depend on individual personal and financial circumstances. Despite your choice in the type of home, it is crucial to adequately understand the terms of your real estate purchase contract and to secure your investment with proper title insurance.


What are a “starter” home and its pros and cons?

As its name suggests, a starter home is an “entry-level” smaller home, often a condo or townhome, and typically two bedrooms or less.

Starter homes have several advantages. A starter home may be a great idea for individuals with smaller families or who are early in their career and foresee new job changes or a growing family on the horizon. A starter home may also be a more prudent option for those who are not financially ready to jump into a forever home by allowing them to build equity that they can later apply towards the purchase of a new home after outgrowing the starter. A starter home may also upstart your wealth accumulation if the property is held as a rental after moving out.

One of the downsides of a starter home is the potential for more repairs and maintenance costs if the home is older. Properties located in areas that are on the decline may also be harder to sell when the time comes to move.


What are a “forever” home and its pros and cons?

A forever home is a home that you may see yourself living in long term such as twenty years or more. Forever homes are often big enough to accommodate a growing family and are the type of property you see yourself making improvements to for your own enjoyment, not just for the future resale value.  Accordingly, these homes are higher in price and require a larger down payment and upfront costs.

Statistics show that millennials have been increasingly skipping the entry-level starter home and settling into their larger forever homes since 2013. Several factors have been cited for this trend. As the younger population is delaying major milestones such as marriage and children, the wait allows them to save a larger down payment for that long-term home that will accommodate a growing family. Conversely, in many areas of the nation, the shortage of lower-priced starter homes pushes younger first-time home buyers into their forever homes[4]. Migration patterns of young adults moving out of high-priced cities to more affordable states have also enabled them to purchase larger more expensive homes.

There are several advantages to skipping the starter home altogether. The cost of a larger home with additional amenities might sometimes cost the same as the smaller, older home. For example, the fixer-upper starter may need new plumbing and a roof, the cost of these expenses may instead be applied towards the mortgage of a forever home with new plumbing and roof. Additionally, with the cost of starter homes rising due to inflation and supply issues, construction of these homes has sharply decreased. Accordingly, if you are looking to have your home purchase serve as an investment as well, the resale value of a smaller starter home may not increase at the same rate as a larger forever home.

The most important disadvantage to consider when jumping straight to the forever home is budget constraints and level of experience. Larger homes come with larger utility expenses and maintenance. It is important to determine whether you can afford the monthly carrying costs of a larger property and whether you are willing to take on the added “chore” of maintaining a larger home.



Purchasing a home is a major milestone and one of the largest investments you will make. Regardless of the type of home you choose, it is important to have experienced professionals guide you through the process and ensure that your real estate contract is valid and enforceable, and to properly insure the title of your property. Contact one of the experienced attorneys at GM with your real estate questions before embarking on your new home journey!

[1] https://www.bankrate.com/mortgages/millennials-and-homebuying/

[2] https://www.nar.realtor/sites/default/files/documents/2021-home-buyers-and-sellers-generational-trends-03-16-2021.pdf

[3] https://www.usatoday.com/story/money/2018/05/07/millennials-buying-first-home-skip-starter-house-buy-dream/582309002/

[4] https://www.usatoday.com/story/money/2018/05/07/millennials-buying-first-home-skip-starter-house-buy-dream/582309002/

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.