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Megan McArdle

New Starter Homes Hit a Dead Stop

Can you build a house for less than $200,000?
A rare sight these days.

A rare sight these days.

Photographer: Matthew Busch/Bloomberg

Can you build a house for less than $200,000?

Well, you personally probably can't. But what about developers? Builder magazine says it's getting harder and harder to do. The market for new "starter homes" is drying up, mostly on the supply side. As credit markets recover, there are more and more people who could be buying their first homes ... if only builders could build them. But for a host of reasons, they can't: