Spiking values for entry-level homes may prevent some first-time homebuyers from entering the housing market this spring, according to the first-quarter Zillow Real Estate Market Reports.
The cost of entry-level homes, meaning those in the bottom third of the market, are rising the fastest across more than half of the largest markets across the country, Zillow found.
The median value of these homes in Denver, where they rose the most, grew 20% over the past year while inventory shrank 13%. Portland, Ore., and Dallas saw the next highest gains in value, while Portland saw the biggest
Given these two factors, first-time homebuyers are likely to have fewer affordable options.
"It's going to be a tough home-buying market this spring, especially for first-time buyers or even people looking to move up into a slightly more expensive home," Zillow chief economist Svenja Gudell said in a news release Friday.
On the other end of the spectrum, top-tier homes are experiencing price cuts on a more frequent basis, with the share of these more expensive homes seeing a price cut increasing 1.6 percentage points from last year.
