Marketplace - A "starter" home for $1 million?

Episode Date: June 23, 2026

A typical starter home in nearly 250 U.S. cities is now worth $1 million or more, according to Zillow. Is that even a starter home anymore? In this episode, how rapid housing inflation has changed the game for first-time homebuyers and why more Americans are opting for a starter home in the suburbs. Plus: Manufacturing data reflects strong sector growth, U.S. trading partners bear the economic brunt of Trump’s war with Iran, and the 1973 oil crisis provides lessons for dealing with chaotic fuel costs today.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.Read the stories from today’s episode:A key index shows the U.S. economy is expanding. Elsewhere, not so muchStrong manufacturing numbers mask a sector hedging against war and tariff uncertaintyFor this London honey seller, Brexit has been "a chaotic 10 years"When the "starter home" price tag hits $1 millionWhat can the oil crisis of 1973 teach us about today?A fixer-upper became a forever home for this Massachusetts couple

There's a lot going on right now. Mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air. I'm Brooke Gladstone, host of WNYC's On the Media. Want to understand the reasons and the meanings of the narratives that led us here and maybe how to head them off at the past? That's on the media's specialty. Take a listen wherever you get your podcasts. The big economic picture is good. Sometimes the tighter view is good, too, so we'll do both.

From American public media. This is Marketplace. In Los Angeles, I'm Kai Risdahl. It is Tuesday. Today, this one is the 23rd of June. Good as it always is to have you along, everybody. We're going to go macro and micro in our approach to the economic news. Oh, the day today, global and local, if you will.

We learned this morning, courtesy of S&P Global's Purchasing, Manage, That's PMI in the vernacular. The growth in both services and manufacturing in this economy picked up in June. Take a look around at other major developed economies, though, and it is a whole different ballgame. In the Eurozone overall, business activity contracted for the third straight month, albeit just slightly. Also, though, some of Europe's biggest economies were some of the weakest. Germany's PMI had a one-and-a-half-year low. France clawed its way back from a bit more than a two-year low.

So, Marketplace of Mitchell Hartman explains the good news and the bad news. Seems like we've got another demonstration here of U.S. economic exceptionalism. Yet again, the United States continues to post pretty robust growth amid all the global turbulence and uncertainties. Ishwar Prasad teaches economics and trade policy at Cornell. For the rest of the world, it's not as pretty a picture. And the U.S. is a major spoil. of that picture because of oil and supply chain disruptions caused by the war on Iran. Prasad says Japan, the EU, the UK.

All of them are dealing with a significant uptick in inflation. This has put a damper on what was already a pretty soggy set of economic prospects. The dampest is the United Kingdom, says Jennifer Lee at BMO capital markets. For the UK, it's almost like when it rains and pours. Composite PMI, 14-month low. Now they're dealing with yet another new prime minister, the unstable political environment is unsettling for businesses. There is a silver lining in the recent PMI data, says Gary Schlossberg at the Wells Fargo Investment Institute. While business activity is still contracting in many developed economies, it's doing so less than in May. A slowdown is decelerating. A lot of that has to do with the fact that there's a little bit less concern about the city.

situation in the Gulf. The two sides are talking. And crucially, global oil prices have fallen to within about $10 of their pre-war level. This month's PMI reports indicate that other input prices paid by businesses have now peaked and are heading down again. I'm Mitchell Hartman for Marketplace. All right, Mitchell had the global. Marketplace's Elizabeth Troval has the local. Initial June data from S&P Global showed a strong performance in U.S. manufacturing output. according to economist Chris Williamson. I mean, this is a real growth that we're seeing. But that growth isn't necessarily happening for the right reasons.

There is some worrying signs here. Since the outbreak of the war, there's been a increase in buying, not just to meet production needs, but to build some safety stocks. So precautionary stock building ahead of potential further supply problems or further price rises. Erin McLaughlin with the conference board also has a hunch, manufacturers or stockpiling. That's because what we're not seeing is a strengthening of employment in that sector. And we're also not seeing really increased in demand at the consumer level. And it's not just the war that has companies nervous. Looking forward, there's uncertainty about what the tariff rate may be.

And if we zoom in on manufacturers, in Maryland, the Carolinas and Virginia, Jason Kosakow with the Richmond Fed, says prices that firms are experiencing have continued to increase due to the conflict in Iran and also additional tariffs. Though he says overall manufacturers there are optimistic. Firms are very bullish about the next six months. And in the Midwest, Tom Wallstrom with the Chicago Fed says manufacturers there are reporting above average growth. Defense is a strong sector the other strong sector is products for data centers. Things like semiconductors and building materials.

I'm Elizabeth Trowball for Marketplace. Wall Street today, let's just say the bloom appears to be coming off the AI rose. It started in Asia overnight, worked its way all around the world to the corner of Wall Street and Broad in Lower Manhattan. We will have the details when we do the numbers. We took this program over to the U.K. in 2000. 2019, naively thinking that the deadline in March of that year to finally take the UK out of the European Union was actually going to hold. Well, shame on us, because it wasn't until almost a year after that that the original vote on Brexit 10 years ago today was a done deal. All of that is a very long way to say that on that 2019 trip, I met Sam Wallace.

She's the owner of a stall in London's Borough Market where she and her husband sell honey. It's called from Field and Flower. And given the anniversary and all of the British news this week, we figured we had to get her back on the phone. Sam Wallace, it's so good to talk to you again. Hi, how are you? I'm well, I'm well. But look, you're the one with all the news going on over there,

the whole prime minister thing. And oh, by the way, 10 years of Brexit, holy cow. Yes, I know. It's been quite the morning. I mean, it's been quite a few months. I guess if you're following the news from over there about over here, frankly, it just feels very messy. And how can I say, bitter sweet, although probably a bit more bitter about the Brexit anniversary or the kind of timings at the same time.

It just feels, yes, like it's been a chaotic 10 years from my perspective as a little business owner, definitely. Let's talk then about you as the little business owner. First of all, as I always do, how is business at the honeysaw there in Burrow Market? Do you know what? It is pretty good. I really cannot complain. But, again, you know, you're always nervous about the future. you're always worried that the good thing won't last.

We had a good Q1, I have to say, a good Q1, given that there was already, you know, quite a lot of turmoil and there's cost of living crisis still going on in the background. But Q2 at the moment, I have to say, is very up and down, which is exciting, if I think it that way. Exciting is an interesting choice.

Why is Q2 up and down? I'm not sure. other than to say, I think, so global events, obviously with events in Iran, it's cost of fuel and travel. We have a lot of European visitors. So, you know, if you're a family from, say, Barcelona, I don't know if it's even feasible economically anymore to come to London. London's already an expensive to city to be in. It has always been thus. But, you know, with the current kind of exchange rates and with the cost of travel, the cost of staying, places and being in places. And so I think that. And then I think more locally here in the UK, we've got all of that going on. But then we have this political turmoil with the prime minister and the governing party and economics and the way forward for the country, which I think makes people very nervous.

You know, it just makes people not want to necessarily spend money. Yeah. Can we talk for a second about the actual product that you sell? You have been, for most of the time I've been talking to you, wildflower oil. honey, a lot of it from Europe. And Brexit obviously was a huge wrench in those works. Here we are, 10 years on. You've adapted somewhat, but, you know, how much of a crimp in your style is it still? Oh, it's, I mean, it's the costs are pretty hefty. I mean, I think if we're going back 10 years ago, and of course all costs rise over time, you know, transports are what

we pay to freight across Europe these pallets of honey. It used to cost us something like, I think it was 190 pounds prior to Brexit. And that was it. And you just needed an invoice. So you just needed one piece of paper. Now, I think our transport at last glance was £380.80. And then we have all the extra paperwork, the red tape. So this is a whole new language and stress level, because we're, of course, not in control. It'll be no surprise to you, but we really hate being out of control. Yeah, no, totally. I get it. I get it. For those doing the math at home, it's about, what, about $1.30 to the pound, if you want to do all those calculations. I should have probably started with this, but I'll end with it anyway. So 10 years ago, 23rd June 2016, do you

remember your initial reaction when you heard about the Brexit vote and which way it had gone. Oh, I think utter shock and dismay. I mean, real dismay. I come from European roots. You know, my dad's side of the family will come from Europe, some of them in the Second World War. And so I've always been brought up as European, you know, British, absolutely, you know, then frankly English and a Londoner, a very important part of the identity. And in London, nobody really cares where you're from. You are a Londoner. I just felt a real wrench. I felt very sad and a real share. that it had been allowed to come to that because I you know the people that voted they voted how they voted and that's fine but they we should not have had that vote it just was wrong I think yeah if you happen to find yourself in London go to the borough market and find the stall

where sam Wallace works and owns it's called from field and flower sam thank you so much it's always so good to talk to you oh it's an utter pleasure kai have a lovely day this will come as small solace, but inflation doesn't play favorites. Too much money chasing too a little of almost anything and price levels are going to go up. And housing is not immune. There's a new report from Zillow showing the number of cities where a typical starter home, typical in air quotes there, the number of cities where that home is worth a million dollars or more, is it an all-time high of 242 cities tripling since the before times. For the record, Zillow defines a starter home as being in the lowest third of home values in any given region. But one person's definition, here's

Marketplace's Kristen Schwab. Identifying what a starter home is these days is tricky because the definition is changing. So much that Susan Wachter, a professor of real estate at Wharton, won't offer a definition. So I think I'll pass on that one and we'll just let it be. Entry-level homes are different depending on where someone lives. There's no unifying square footage. But Wachter says the price first-time buyers pay is outpacing the overall cost of housing. It's an outcome of the general economic trends that explain why housing prices have gone up overall. Start with land prices. And materials, labor, and appliances, they've all gotten more expensive.

So builders are building bigger and fancier for better margins. But it's not just the market that's changed. Buyers have changed, too. Jessica Loutes, Deputy Chief Economist at the National Association of Real Estate, says new homebuyers used to buy condos. We are increasingly seeing first-time homebuyers look to the suburbs, look to a single-family home, because the age of them purchasing their first home is 10 years older. Lout says people are buying later, yes, because housing is harder to afford,

but also because marriage and family formation are happening later. By the time people are ready and able to buy, they want something they can grow into. The typical first-time home buyer is expecting to live in that home for 50. That's twice as long as the historical average. Also, elevated home prices and mortgage rates are making people stay put. That's the case for Joel Berner, a senior economist at Realtor.com in Austin. We bought a small starter home and we're feeling like we're going to be there longer than we intended just because of the way the market works right now. He says the market needs more smaller starter homes, but it also just needs more homes, period. And so even for the people who might leave a starter home, they don't have a lot of options themselves.

So it's kind of this backup, this traffic jam. Berner says, according to Realtor.com's estimate, the U.S. is short about 4 million homes. I'm Kristen Schwab for Marketplace. Coming up. We paid just over $100,000 for it in 1983. Wait until you hear the rate on that mortgage. Oh, gang. First, though, let's do the numbers.

Well, this one's the wall was for the NASDAQ. Hold on to your hats. The NASDAQ down 579 points today. Two-and-two-tenths percent, 25, 585. The Dow slipped 45 points, about a 10th percent, 51-66. Uh-oh. S&P 500 down 107 points. One and four-tenths percent, 73 and 65.

Cardival reported earnings today beating estimates, but full year guidance was disappointing. Thus, Carnival drooped four and nine tenths of one percent on the day. Royal Caribbean, or Royal Caribbean, I don't know, take your pick. Leads the category, by the way, by market capitalization, up less than one-tenth of one percent. Happy birthday to Reddit, the site which bills itself is the front page of the Internet, founded on this day in 2005. Reddit is, according to the Data Insights Company's similar web. It is the sixth most visited website globally, publicly, publicly traded as of 2024. Down 2 and 8 tenth percent on the day.

You're listening to Marketplace. This Marketplace podcast is supported by Inuit QuickBooks. If you're trying to grow your business, Intuit QuickBooks workforce can help you lead your business with confidence, clarity, and in a way that makes sense for you. As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or businesses' finances are the same. As your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities, businesses, expect with the flexibility to adapt to your specific needs. QuickBooks workforce combines human intelligence and AI-powered tools, so you get smart automation without ever losing control, spend less time reconciling and more time deciding

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Hey, everyone. I'm Rie Maechres, host of the Marketplace podcast. This is uncomfortable. We all have that one financial task we're putting off. Maybe it's a bill you need a dispute, some paperwork you've got to submit, an account even neglecting. Personally, I've got a pretty long list. You know, studies show that it's much easier to get things done if you do them

alongside someone else. So on July 1st, that is what we're going to do. I'm hosting a virtual co-working event where we all show up with at least one financial task we've been avoiding and spend an hour finally dealing with it together. So please bring the thing you've been putting off. I'll bring mine, and we'll see you on July 1st. You can sign up for the virtual event at marketplace.org slash TIU. This is Marketplace. I'm Kai Risdall. We're going to do a little pop quiz on the way to this next story. What do the International Energy Agency, the original 55-mile-an-hour speed limit, the strategic petroleum reserve, and fuel economy standards all have in common. I would give you a little bit more time, but the show's only half an hour, so I'm going to tell you the answer, last chance here, is the 1973 Arab oil embargo. And one cannot help but imagine that that energy shock might have some less than four to.

today's. So we've called Meg Jacobs. She's a professor of history at Princeton. Also, as it happens, the author of Panic at the Pump, it's all about the oil crises of the 1970s. Professor Jacobs, welcome to the program. It's good to have you on. Nice to be here. Thank you. Do me a little compare and contrast here. Would you, with an eye toward economic power, 1973 versus today, oil, embargoes, straight of Hormuz, all of that. It's a good comparison, 73, 26. 26 doesn't necessarily have the same ring yet, but it might because... Yet. I feel great now.

Yeah, right. It might because 1973, the moment of the Arab oil embargo is remembered and rightfully so is this big turning point, certainly in American history and also in global economic history. And that's the moment when Americans, writ large, discovered. that they were not as powerful as they thought that they were. And also, and, you know, this is based on things you've said and said on this program, Kissinger Nixon in 73 misjudged Arab economic power the same way it seems that President Trump is misjudging Iran today. I think that that's fair. As late as September and the embargo started in October, as late as September, Richard Nixon was on the record saying that the oil producers in the Middle East,

would never use the quote-unquote oil weapon because oil in the ground wasn't worth anything to them. And lo and behold, that's exactly what they did in an effort to reshape American politics in the region. For those who don't remember 73, 74, 75 and the economic after effects and what it felt like in this country, what did it feel like when we, as Americans, discovered we didn't have all that economic power you were talking about? came as a tremendous shock. I mean, you know, we were a very celebrated producer of oil. No country was more identified with the open road than the United States. And very few Americans knew that we had become increasingly dependent on oil imports from abroad. So to overnight have this supply

disrupted came as a really big shock. And the shock itself then manifested. itself into a panic. And you have to be of a certain age, which I am, and I'm guessing you are too. You and me both. To remember that the panic really was everywhere because you saw lines at the pump working their way all around the country as people feared that they would not have access to oil and as they also saw the price of oil quadruple in a very short period of time. Okay, so look, with the understanding that you are an historian and not a fortune teller, what lessons do you anticipate, you know, Americans have a tough time learning lessons, but let's give us the benefit of the doubt. What lessons might we learn from this particular episode? Well, I mean, you know, we learned that Iran is prepared to close down the straight, something that I think the president did not necessarily anticipate, although he's. He had been warned that that was one of the dangers.

And what might not make, quote, unquote, economic sense for various reasons, the Iranians determine makes political and military sense for them and possibly now even economic sense, too. As we see Trump reversing sanctions, the question of lessons to be learned, you know, you just said we're not very good at learning lessons. 73 is a long time ago. The main goal in the 1970s was independence. The United States should not be dependent on any foreign country for its oil. And even as we are independent, really, in terms of our oil, we are still vulnerable.

So in terms of lessons learned or really not learned, the question is, why are we still so dependent on oil? And basically, until that changes, I think we're going to see this ongoing vulnerability. Meg Jacobs at Princeton. Professor Jacobs, thanks for your time, M. I appreciate it. Thanks so much. 37 million people sounds like a lot. It is a lot in absolute terms.

Works out to about 11% of the U.S. population. That's how many people, this is from the Census Bureau, by the way, moved in 2024. That, though, is a record low, down from 14% just a decade ago. There are lots of reasons for that, of course, many of which we cover on the regular here, high prices, high mortgage rates, low supply of housing among them. In the end, though, home isn't just about where you move. It's also about where you stay. Here's this latest installment of our series Adventures in Housing. My name is Louis Chen. My name is Carol Jean. We live in Watertown, Massachusetts. In a house that we've lived in for 43 years. It's a two-family house with two units side by side. I would say we looked at a lot of

single-family houses out in the suburbs, and between the commute and the price, we just didn't find anything that we liked. It doesn't look like any of the two-family houses that you imagine because it was built on a little here and raised a little bear and a little, this thing was put on, and that thing was put on, and so it has a very irregular shape, and it was not in very good condition. It was habitable when we moved in. But at the same time, there were, ceilings that were full of cracks and one of them completely fell down. We had a lot of that kind of thing that we had to deal with. So, yes, the income that we could gain by renting the other side was definitely a factor

in making it affordable for us. We paid just over $100,000 for it in 1983. And it was a 30-year fixed mortgage at 12%. We thought that was good. because mortgage rates had recently been 18%. We refinanced several times. We have a little less than two years to go on what will hopefully be our last mortgage. There was a point in time when my manager told me that my job was moving to somewhere out west,

and I had a choice. I could either move with the job or take the severance package. And I wanted to look, but Caroline's... said to me, you can go look, but I'm not going with you. I had a job here that I liked, and we had a number of very good, close friends, and it seemed like a lot to give up. We've talked about aging in place, in which case we might expand our lives into the other part of the house that we now rent out and create a new bathroom there, so we could live on the first floor and wouldn't need the stairs if we couldn't do them at all. So we have a lot of options

in this building. It's done well by us. We've enjoyed our time here. A lot of history, a lot of funny stories. Our daughter loves this house. You have to believe that we probably have less time going forward than we had in the past at this point in our lives, but it's served us well, yes. Twelve percent mortars. Lutu, Tann, and Carol Geraldine Smith in Watertown, Massachusetts for 43 years now, whether you are looking for that forever home or maybe you're already living in it. Share your story with us, would you? Marketplace.org slash adventures and housing.

This final note on the way out today saw this on Axios, courtesy of our Friday regular Courtney Brown, for which my personal choice of a headline would have been, be careful what you wish for. You just might get it. New research from Stanford, the Bank of England, King's College, London, and the University of Nottingham, estimates by the end of last year, Brexit had made the UK economy between six and eight percent smaller than it would have been had the remain side one. There is a lesson in there somewhere. Jordan Manjeeh Maharaj, Janet Wynn, Oga Oxman, and Virginia

K. Smith are the digital team. I'm Kai Rizdahl. We will see you tomorrow, everybody. This is APM. I'm Amy Scott, host of How We Survive. And this is this. This week, we head to Europe to learn more about carbon capture with our friends from the DW podcast, Living Planet. In Europe and particularly in Norway, they've used carbon capture since the 1990s to reduce their emissions. What's different in Europe, particularly today, is that the same technology of capturing CO2 is being used to then bury that CO2 underground in what's called CCS, carbon capture and storage. And while there's potential in this technology, some worry about fossil fuel companies investing in carbon capture instead of renewable energy. Join us as we follow the life cycle of carbon dioxide, from its release at a cement plant in Norway to where it's captured and buried under the North Sea.

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