In these larger metro areas and smaller cities that are very desirable places to live, land prices have increased more to much more than the prices of homes. The most pronounced effects of this are very few small homes being built and larger new homes being the norm. It isn't as profitable to put a small, affordable house on an expensive lot.
Back in 1950 the average size of a new house was about 1000 sq. ft. Now the average size is around 2,400 sq. ft. So, along with inflated home prices, this isn't affordable for someone with a median income. People need access to small (900-1,200 sq. ft.) homes.
In rural inland areas and smaller cities in the South and Midwest this is still viable. There are places that just need development and zoning reform. Looking at zoning regulations for Shawnee County, KS, where Topeka is, they could use some areas zoned for smaller single-family residential lots. There are correlations between lot sizes and the sizes of the homes built on them. For instance, a 1,000 sq. ft. house shouldn't require a 4,000 sq. ft. to 6,500 sq. ft. lot. Bigger lots result in lower urban density and bigger houses, and this adds to housing costs.
Some of these places should try working with their zoning and seeing if this opens up the areas to prosperity and development. First of all, this is new construction. Affordable homes in areas such as Topeka mean someone not only saves on the price of the house, but they also save on the interest. Moreover, someone who might take out a 30-year loan for a starter home in Portland, OR, could benefit from a 15 or 20-year loan on a starter home in Topeka.
