New starter homes make a comeback in Tucson

In recent years, homes being built here grew in terms of size and height, with some models up to six bedrooms.

With rising home prices and interest rates, a national homebuilder is bringing back the “starter home.” The goal: attract first-time buyers, or empty-nesters who are downsizing.

KB Home offers one-bathroom and two-bedroom models starting at $249,000.

By comparison, the average new homes price in the Tucson market currently exceeds $440,000.

The KB Home models, ranging in size from 850 square feet to 1,700 square feet, are available at several of its developments around the Tucson area.

“People come in with an idea of how many square feet they need,” said Amy McReynolds, president of KB Home’s Tucson division. “These models get you in to start that generational wealth and build traditional equity.”

She said high interest rates have pushed many prospective homebuyers to the sidelines and these models give them an option.

“We’ve gone smaller,” McReynolds said.

Eliminating hallways with open floor plans has been one tweak to get more living space in a home.

KB Home has consistently been in the top five homebuilders for new permits and sales in the Tucson market.

Its subdivision Saguaro Haven, on West Valencia Road and South Camino De La Tierra, was recognized by the Southern Arizona Home Builders Association as “a great example of an extremely well planned, designed and built community for families and first-time buyers,” said David Godlewski, president of SAHBA.

“As a community, if we value providing attainable housing, we should be looking at ways to incentivize not only starter homes but improving zoning and removing barriers to all types of housing,” he said. “When we make it easier to build, we will increase inventory and affordability.

“Not only do we need more starter homes, but we need more homes period.”

The limited number of starter homes is not unique in the Tucson market. Nationwide, the size of new homes has grown steadily and more than half of all new homes built have included four or more bedrooms in recent years.

Zoning laws, such as minimum lot sizes and off-street parking requirements have contributed to builders opting for a larger home footprint.

Buyers have also contributed to the change in product.

In decades past, younger buyers — those in their 20s — wanted to start out in a smaller house with plans to upgrade.

The average first-time buyer is now approaching 40 years of age and looking to buy their first — and forever home — at the same time.

An added factor is that many existing homeowners are staying in their homes longer, with their low interest-rate mortgages, and keeping those properties off the market.

Traditionally, when existing homeowners upgraded or retired and downgraded, those homes would be available for first-time buyers.

The average home resale price in the first half of the year was $433,305 compared with $441,866 for the average new home.

That has benefited the new home market, which is expected to outperform 2025 this year with new permits issued, said Jim Daniel, a local housing analyst with R.L. Brown Reports.

“The region is experiencing unprecedented economic and population growth, which should help the local housing market perform better than many, and perhaps most, other areas,” he said. “At the same time, the industry must respond to the ‘new marketplace’ with discipline, avoiding unchecked optimism and closely monitoring conditions so it can adjust and reposition as needed.”

Examples of such shifts include more attached housing, such as townhomes and duplexes, and more starter homes with features such as carports, versus two-car garages.

The city of Tucson, as well as Arizona, have relaxed some rules for adding density in urban areas with townhomes, duplexes, triplexes and fourplexes.

The new state law, which went into effect this year, only requires one off-street parking space per unit.