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Industry Trends5 min

Solutions for the Starter Home Shortage

The supply of modestly priced starter homes continues to drop nationwide. A recent report by Realtor.com found that the number of homes priced above $750,000 grew 11 percent last year, while the number of starter homes priced under $200,000 fell by 8 percent. 

Home values and rent continue to increase, but average salaries across the United States are not increasing at the same percentage. Consider that the average home value in 1950 was $7,400 and the household median income was $2,990. In 2010, however, the median home value was $221,800 (an increase of nearly 2900%) while the household median income was $49,445, which is an increase of only 1554% (source: U.S. Census Bureau via Curbed). That disparity is one of the reasons that the American starter home is out of reach for many entry-level buyers.

But designing and building starter homes doesn’t have to be restrictive in order to keep costs at bay. Rather, smart design and smart product selection can help buyers achieve the American dream without sacrificing quality.

Some of the challenges when building starter homes:

  • Narrower, smaller—even subdivided—lots
  • Designing a home that can be remodeled and/or grow as the family grows or can financially afford to add on
  • Clever use of space to maximize square footage, particularly mindful of Millennial first-time homebuyers
  • Integrating design, structural and sustainability elements that defend the build

KB Home, who partners with LP, takes advantage of LP® TechShield® Radiant Barrier, an easy, low cost energy efficient upgrade, and is at the forefront of companies trying to boost the supply of affordable entry-level homes. In KB Home’s Q1 earnings call, Chairman/CEO Jeffrey Mezger said that “offering more affordable products within our communities is also key. Our efforts to address affordability concerns by expanding the choice of square footages available to homebuyers are well underway, and we expect to continue to introduce lower square footage plans in select communities in the months ahead. A good example is our new Autumn Winds community in Riverside County, California. We added 1,400 and 1,500 square-foot plans to complement our initially planned lineup for this community, which had ranged from 1,600 to 2,400 square feet. Since the opening, these two small plans have generated about 25 percent of this community’s net orders. 

Nationwide, smaller metro areas continue to be the most affordable entry points for first-time homebuyers. A recent U.S. News and World Report found that would-be buyers in Huntsville, Alabama, and Ft. Wayne, Indiana, only needed to earmark 19 percent of their income toward housing – far less than the percentage needed in the top 20 markets in the U.S.

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Business Solutions

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Q&A: How Home Orientation Impacts Continuous Insulation

There’s a lot to consider when it comes to building an energy-efficient home for your clients and the many nuances that change with each build—including its orientation to the sun.

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Resiliency Solutions

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HOW A RADIANT BARRIER CAN IMPROVE BURIED DUCT PERFORMANCE

There are several insulation methods based on attic design, but ducts placed over the bottom of truss chords and buried under insulation in a vented attic is a popular builder option.

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How to Drive Effective Communication and Collaboration on the Jobsite

Every jobsite has a ton of moving parts, from product shipments, supplies, and schedules to subcontractors and homeowners. It’s no wonder that many project teams can struggle to maintain quality jobsite communication and collaboration throughout the building process.

Sustainability Solutions

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Carbon Negative, Future Positive: LP® Structural Solutions Portfolio Releases Environmental Product Declarations

In an era where environmental responsibility is paramount, we are proud to announce a remarkable achievement: the LP® Structural Solutions portfolio has been officially designated as carbon negative. This milestone is a testament to our unwavering commitment to redefining construction materials for the better with a focus on sustainability, resiliency and groundbreaking advancements.