3 Signs You Might Get Stuck in Your Starter Home Forever

In February, the median existing home sold for $384,500, according to the National Association of Realtors. Home prices in your area may be higher or lower. But either way, they're probably elevated now compared to where they were a few years ago. And since mortgages have gotten expensive to sign, the combination of higher prices and higher borrowing rates may lead you to consider a starter home rather than buying your forever home off the bat.

As the name implies, many people purchase a starter home with the intent to move at some point. But if these signs apply to you, you may end up in your starter home forever.

1. You're stretching your budget to buy your starter home

Home prices are up these days largely due to a general shortage of inventory. So you may have no choice but to stretch your budget to purchase a home, even if you'd rather not do so.

If you pay too much for a home, though, you may not be able to save money to eventually upsize. So that could lead to a situation where you don't end up moving -- even as your income rises and mortgage rates come down.

2. You're buying a home that needs a lot of work

Some starter homes are in fine condition but are simply small in size. If you're buying a home like that, you may eventually be able to upgrade. But if you're buying a starter home that needs a lot of work, you may end up stuck there for the long haul.

Let's say you buy a $250,000 starter home, only over the next five years, you wind up spending another $140,000 to get it into decent condition. At that point, you're in the same boat as above in that you may not have the money to afford a different home.

And from there, you could of course wait a number of years to boost your cash reserves. But once you've been in the same home for a decade or longer, it's easier to resign yourself to staying put.

3. You're not planning to grow your family

Some people buy starter homes when it's just them or they're only part of a couple, and then upsize later on once kids come into the mix. But if you don't intend to have children, you may find that paying up for a larger home is a waste of money when you can fit into your starter home just fine.

Also, if you're childfree, you may enjoy certain habits like dining out frequently and traveling. If you upsize to a more expensive home, you may find that you have to give those things up. And that alone might motivate you to stay.

Staying in your starter home isn't necessarily a bad thing

Any time you purchase a starter home, it's important to brace for the possibility of never leaving it. But staying in your starter home for the long haul isn't automatically a bad thing.

If you settle into a routine where you can afford your starter home payments, not upsizing could allow you to save money month to month and meet different financial goals. And also, there's something to be said for staying in a neighborhood you're comfortable with.

Plus, if you have kids while living in your starter home, moving could be tough. It could mean having to pull your children out of their school district and effectively forcing them to start over when it comes to making friends.

So all told, there can be benefits to staying a starter home -- whether you're forced to do so or you choose to do so.