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Even the Cheapest Homes Are Too Expensive for Millennials

Lowest-priced homes are now outpacing growth for the highest tier
Sales of Existing Homes in U.S. Unexpectedly Dropped in June
Photographer: Jonathan Alcorn/Bloomberg

Buying a home should be getting easier for millennials amid sustained gains in U.S. hiring. Instead, increased demand for a scarce supply of starter homes is pushing prices beyond their grasp. 

Prices for the least expensive previously owned homes — properties at 75 percent or less of the median — were up 10.7 percent in August from a year earlier and now represent the only one of four price tiers to surpass the peak reached during the housing bubble, according to a housing index from CoreLogic Inc. The August pace was 5.9 percent above its pre-recession high in October 2006.