Why Starter Homes Are So Hard to Find in Montana

Nearly $94,000. When it comes to buying a new average priced home in America,  that's how much money it takes just to cover regulations.

Wow. That's the number that stood out to me when I was chatting with the Big Sky Business Journal's Evelyn Pyburn Monday morning. Here's what she had in the Hot Sheet:

Construction of affordable 'starter homes' has decreased 75% since the 1970s. Rising costs aren’t the only thing stopping first-time homebuyers —only 9% of recent new construction is for starter homes.

The reason? According to the National Association of Homebuilders: 

The current average price ($394,300) of a new home, regulation accounts for $93,870 of the final house price. Of this, $41,330 is attributable to regulation during development, $52,540 due to regulation during construction.

Last week, during the Montana State University Turning Point USA event, former presidential candidate Vivek Ramaswamy talked about young people and the inability to afford housing. He highlighted government regulations at the local level for being a big culprit.

The next morning, Eugene Graf (a great homebuilder in the Gallatin Valley) joined us on the radio LIVE from the Rockin R in Bozeman. He is a past president of the Montana Building Industry Association, and is very involved with the NAHB. He pointed out how building the smaller starter homes is actually HARDER than building the larger homes.

Eugene Graf: "Sometimes the more affordable stuff takes a little longer to get through the bureaucracy of permitting and getting out of the ground. And it's unfortunate that sometimes those costs just continue to escalate. And it's not the result you want."

He added this: "All types of housing need to be provided at all different price levels, so people can can get their foot in the door and hopefully move to that American dream of owning their own home."

Full audio with Eugene is below: