Homeownership has doubled in the last year, making many large metro areas unaffordable for renters to purchase their starter homes. 

"Vanishing inventory is just the tip of the unaffordability iceberg as daunting mortgage rates crush renters' homeownership goals overnight," real estate research firm Point2 said. 

The good news is that Point2's new study found the last four metro areas where renters can afford starter homes. Those cities include Detroit, Michigan; Tulsa, Oklahoma; Memphis, Tennessee; and Oklahoma City, Oklahoma. 

Point2's data shows the percentage of starter homes built over the years has collapsed. 

Once upon a time, nearly 70% of all new builds were starter homes — single-family houses with 1,400 square feet or less that started at $6,990. But that was in the 1940s. Fast forward to 1980 and that share fell to 40%. Then, in 2019, the U.S. Census Bureau reported that a mere 7% of all new homes were represented by the small, entry-level homes that are affordable for first-time buyers — and the prices aren't even remotely similar.

Due to the increasing cost of land, as well as zoning restrictions and skyrocketing costs for building materials, the modest, bare-bones homes of yesteryear have become the stuff of myths and legends — the actual unicorns of the real estate market. More elusive than ever, this type of home seems almost extinct.

Point2′s analysis showed that as mortgage rates skyrocketed, the number of metro areas offering affordable starter homes shrank from six in August to just four this month. 

In August, when interest rates were hovering around 5.5%, renters in 6 large U.S. cities could comfortably afford to buy a starter home. One month and an interest hike later, that number swiftly fell to 5… and then 4.

To estimate affordability, Point2 follows the standard personal finance rule that a mortgage payment shouldn't exceed 30% of a homeowner's gross monthly income.