Compared with where it was more than a decade ago, home ownership among young adults is low. Nationwide, adults who are 35 years old or younger accounted for a little more than one-third of all homeowners last year, compared with 43.6 percent, this century's peak, in 2004.

The reduction, caused by the Great Recession and exacerbated today by barriers such as student debt, delayed marriages, and tight credit, has precluded as many as three million first-time home buyers from entering the real estate market in the last decade, some observers say.

But millennials and other new buyers are facing another significant barrier: too few starter homes on the market for them to buy.

Since the housing industry began recovering, markets across the country have struggled with low inventory. Spurred, in part, by dampened home building and an increase in the length of time that homeowners are staying in their homes, fewer properties in recent years have been listed as for sale. When they are, buyers often confront fierce bidding wars, leading nearly a quarter of all homes last year to sell over asking price.

More than any other market segment, starter homes have been in low supply. According to Trulia, starter homes — defined as a home priced in the lower third of a market — accounted for just 22.9 percent of the national market, and 25.4 percent of the Philadelphia metro area at the end of 2017. Premium homes, the market's top tier, in contrast, accounted for 53.1 percent of the national market, and 46 percent locally.

Premium homes "continue to make up a larger share of the for-sale market," Ralph McLaughlin, Trulia's chief economist, said in a December report. And that, he continued, "spells trouble for first-time home buyers."

Starter homes have felt the largest squeeze for a number of reasons: Many entry-level homeowners remain underwater, meaning they owe more on their mortgages than their homes are worth, making it unlikely they would sell for a loss. Meanwhile, investors have scooped up properties they can buy for cash and turned them into rentals. Plus, as labor and land costs have risen, developers have chosen to build at the higher end of the market, where margins are more lucrative.

As a result, many millennials and lower-income shoppers are often stuck renting — or overpaying when they buy. Some entry-level buyers have delayed home purchases for so long that they are now diving straight into "mid-tier" homes after saving for a down payment for sometimes more than a decade.

Many times, those first-time, mid-tier buyers have children, are married, and are seeking good school districts in attractive neighborhoods — outside the city. But can these first-time buyers find starter homes in the most sought-after Philadelphia's suburbs?

Based on the latest 2017 suburban data from Drexel University economist Kevin Gillen, the Inquirer and Daily News pinpointed the five hottest zip codes in the Philadelphia suburbs, based foremost on median price, plus also taking into account the number of sales and school districts. (No South Jersey zip codes were in the 10 most expensive zip codes. Municipalities with 10 or fewer sales were excluded.)

In each zip code, entry-level homes for first-time buyers — defined here as $350,000 or less — were selected during the week that began Jan. 22 as examples of available starter homes. (Inventory can often fluctuate day to day.) At that price point, data show, entry-level homes are available only minimally — and sometimes not at all.

"It's a tough price point," said Ryan Petrucci, a real estate agent with RE/MAX Main Line. "You can't get a lot [in these locations] for $400,000."

19041: Haverford

634 Haverford Rd., Haverford, 19041

In the 19041 zip code, the median price of a home in the third quarter was $664,900. Only two properties in the zip code were listed during the fourth week of January for less than $350,000.
HomeJab
In the 19041 zip code, the median price of a home in the third quarter was $664,900. Only two properties in the zip code were listed during the fourth week of January for less than $350,000.
This home, listed for sale along Haverford Road, has sat on the market for longer than expected. Realtor Robin Gordon attributes that to the home’s location on a busy road and its proximity to Haverford Station.
HomeJab
This home, listed for sale along Haverford Road, has sat on the market for longer than expected. Realtor Robin Gordon attributes that to the home’s location on a busy road and its proximity to Haverford Station.

Bedrooms: 4        Bathrooms: 2        Square feet: 1,917        List price on Jan. 24: $299,900        Schools: School District of Haverford Township

Median home price in Q3 2017: $664,900       Median income: $109,205       Number of homes listed in zip code under $350K on Jan. 24: Two

Today's first-time home buyers are different from the generations that preceded them, Realtor Robin Gordon said.

"You have Mr. and Mrs. Picky now — the millennials," said Gordon, a Berkshire Hathaway HomeServices Fox & Roach agent. "They are renting longer to build up equity and cash. … They're tough."

As a result, Gordon said, first-time buyers are searching for homes that are turn-key, ready to be moved into. But finding that kind of home at an affordable price can be difficult in the 19041 zip code, she said, home to Haverford Township.

The zip code, which includes both the Lower Merion and Haverford School Districts, has emerged in the last 10 years as a high-demand option, as more residents seek walkable neighborhoods. Yet to get into the zip code, buyers should be prepared to shell out top dollar, Gordon said — or "learn about compromise."

The home Gordon listed along Haverford Road is newly renovated and just steps from the township's train station. But it has drawbacks, too, she said: The home is a twin, rather than a detached home, and it is along one of the township's busiest roads. Even so, she said, she views it as a steal.

"You do not get everything you want, especially for the first-time home buyer," Gordon said. "You have to give up some things in order to get other things."

19312: Berwyn

36 Eastwood Rd., Berwyn, 19312

In the 19312 zip code, which includes Berwyn, this home is listed for $325,000. The median price of a home in the zip code in the third quarter of 2017 was $680,000.
HomeJab
In the 19312 zip code, which includes Berwyn, this home is listed for $325,000. The median price of a home in the zip code in the third quarter of 2017 was $680,000.
Some starter homes in highly sought-after neighborhoods need some work, said Realtor Christopher Aleardi. However, he said, many first-time home buyers are looking for properties that are “move-in ready.” That’s left some entry-level homes in attractive markets, such as this one, sitting on the market for longer than expected.
HomeJab
Some starter homes in highly sought-after neighborhoods need some work, said Realtor Christopher Aleardi. However, he said, many first-time home buyers are looking for properties that are “move-in ready.” That’s left some entry-level homes in attractive markets, such as this one, sitting on the market for longer than expected.

Bedrooms: 3        Bathrooms: 1        Square feet: 1,400        List price on Jan. 24: $325,000       Schools: Tredyffrin/Easttown School District

Median home price in Q3 2017: $680,000       Median income: $119,003       Number of homes listed in zip code under $350K on Jan. 24: Four

Like Gordon, real estate agent Christopher Aleardi said he finds that first-time buyers are not willing to jump into purchases that do not exactly fit their needs.

"These first-time home buyers aren't under any duress to buy," Aleardi said. "They will extend their rent a month."

That has made selling his home along Eastwood Road in Berwyn slightly more difficult. "The kitchen is very tiny, and there is a little bit of functional obsolescence with the house," Aleardi said. "There is only one full bathroom, and it's on the first floor."

Instead, Aleardi said, home buyers prefer to use their buying power where they can get exactly what they want — and more bang for their buck. As a result, he has seen more activity from first-time buyers in up-and-coming suburban neighborhoods that have reliable school districts.

"Broomall, Media, and Wallingford, they are all pretty hot right now," Aleardi said. "You better be going in there offer in hand. … Those are the most competitive."

19072: Narberth and Penn Valley

243 Iona Ave., Narberth, 19072

First-time home buyers have tried to elbow their way into the 19072 zip code, lured by the Lower Merion School District and walkability of its neighborhoods. However, most of the available starter homes in the district are townhouses or condominiums. This home, at 243 Iona Ave. in Narberth, is one in a low supply of single-family homes on the market.
HomeJab via Houwzer
First-time home buyers have tried to elbow their way into the 19072 zip code, lured by the Lower Merion School District and walkability of its neighborhoods. However, most of the available starter homes in the district are townhouses or condominiums. This home, at 243 Iona Ave. in Narberth, is one in a low supply of single-family homes on the market.
“For the Main Line area,” Narberth has better availability of starter homes, said Howard Smith, a Realtor at Houwzer. The zip code also includes Penn Valley, he said, where starter homes are more out of reach.
HomeJab via Houwzer
“For the Main Line area,” Narberth has better availability of starter homes, said Howard Smith, a Realtor at Houwzer. The zip code also includes Penn Valley, he said, where starter homes are more out of reach.

Bedrooms: 3        Bathrooms: 1.5        Square feet: 1,404        List price on Jan. 24: $330,000       Schools: Lower Merion School District

Median home price in Q3 2017: $650,000       Median income: $110,087       Number of homes listed in zip code under $350K on Jan. 24: 24

The 19072 zip code includes both Narberth and Penn Valley — two different municipalities that real estate agent Howard Smith says vary widely when it comes to types of homes.

"Penn Valley has brought the median up — you can easily find a house there for $1.5 to $2 million," said Smith, a suburban agent at Houwzer. By contrast, Narberth has "amazing" starter homes "for the Main Line area."

Finding them, however, can be difficult.

Smith said that on Wednesday, the 19072 zip code market had 24 active listings for properties priced under $350,000. However, just four were for single-family homes, including Smith's on Iona Avenue. The rest, he said, were in Narberth's Oak Hill Condominiums.

"Narberth has been hot, it's continuing to be hot, it's an amazing place to live," Smith said, adding that most properties in the borough tend to sell quickly. (His, however, has been listed for months.)

"People who live in the city and want that city feel come to Narberth because it has that downtown area where you walk to restaurants and bars or to your dry cleaning," Smith said. "It has that city feel, and it's also in an incredible school district."

19087: Wayne, Radnor, and Chesterbrook

18 Rittenhouse Court, Unit 188, Chesterbrook, 19087

This home, located in the 19087 zip code in Chesterbrook, is an example of a starter home available in the area to first-time buyers. The 19087 zip code contains parts of Wayne, Radnor, and Chesterbrook, and, therefore, the types of homes vary widely. Chesterbrook is a good entry point for first-time buyers, many Realtors say.
Alcove Media
This home, located in the 19087 zip code in Chesterbrook, is an example of a starter home available in the area to first-time buyers. The 19087 zip code contains parts of Wayne, Radnor, and Chesterbrook, and, therefore, the types of homes vary widely. Chesterbrook is a good entry point for first-time buyers, many Realtors say.
Located at 18 Rittenhouse Court, this townhouse includes two bedrooms, two bathrooms, and is nearly 1,300 square feet. The photo has been virtually staged.
Alcove Media and Vrxstaging
Located at 18 Rittenhouse Court, this townhouse includes two bedrooms, two bathrooms, and is nearly 1,300 square feet. The photo has been virtually staged.

Bedrooms: 2        Bathrooms: 2        Square feet: 1,266        List price on Jan. 24: $218,900        Schools: Tredyffrin/Easttown School District

Median home price in Q3 2017: $539,000       Median income: $122,266       Number of homes listed in zip code under $350K on Jan. 24: 15

To break into the 19087 zip code, real estate agent Tashia Burton said, first-time buyers are often confined to Chesterbrook, the master planned community in Tredyffrin Township. Compared with the 19087 zip code's Wayne and Radnor Township, she said, Chesterbrook — comprising townhouse, condominium, and apartment communities — can offer home buyers reasonably priced options in strong school districts.

"It's an easier entry point to get into a home," said Burton, a real estate agent for Keller Williams in Wayne. "Wayne might be a person's second home, and maybe Chesterbrook is their starter home."

Listed on Monday, the property at 18 Rittenhouse Court already had two tours arranged by Tuesday, Burton said, plus "calls from other agents with questions."

Of the 15 homes in the zip code listed under the $350,000 threshold Wednesday, Burton said 11 of them were in Chesterbrook.

"You can get into a top school district … and the accessibility is very attractive," Burton said. "That's probably one of the biggest appeals of Chesterbrook."

19085: Villanova

120 Radnor Ave., Villanova, 19085

Located in the 19085 zip code, home to the municipality of Villanova, this three-bedroom, two-bathroom home is listed at $384,900, a reduction from its initial $400,000 list price. The home, a twin, is the only listing that is priced under $400,000 in the entire zip code.
Michael Eckstrom, MJE Photographic
Located in the 19085 zip code, home to the municipality of Villanova, this three-bedroom, two-bathroom home is listed at $384,900, a reduction from its initial $400,000 list price. The home, a twin, is the only listing that is priced under $400,000 in the entire zip code.
The home, which has been on the market for nearly two months, has yet to sell because of some “objections about the layout,” said real estate agent Ryan Petrucci. “There’s not much you can do about that.” Still, Petrucci added, the home is a good way to enter the highly sought-after 19085 zip code and Villanova market, where the median price of a home in the third quarter was $795,000.
Michael Eckstrom, MJE Photographic
The home, which has been on the market for nearly two months, has yet to sell because of some “objections about the layout,” said real estate agent Ryan Petrucci. “There’s not much you can do about that.” Still, Petrucci added, the home is a good way to enter the highly sought-after 19085 zip code and Villanova market, where the median price of a home in the third quarter was $795,000.

Bedrooms: 3        Bathrooms: 2        Square feet: 2,332        List price on Jan. 24: $384,900        Schools: Radnor Township School District

Median home price in Q3 2017: $795,000       Median income: $191,339       Number of homes listed in zip code under $350K on Jan. 24: Zero

As of Wednesday, no homes were priced at less than $350,000 in the 19085 zip code, home to Villanova, the region's second most-expensive zip code in the third quarter of 2017. Only one — here, on Radnor Avenue — was available for less than $400,000.

One of the reasons for that, said Petrucci, the RE/MAX Main Line agent, is that the Villanova market is simply "higher priced." But like many attractive markets across the region, Petrucci said, the 19085 zip code faces another threat, too.

"Inventory is low, and [first-time] buyers are competing with a lot of investors who can pay cash, close whenever, and be flexible with closing," Petrucci said. "That beats out a lot of first-time buyers. … It's a challenging market to be in."