Making it work with Bellingham salaries and roommates - we need more starter homes in this town

My husband and I are in our late 30s and bought a house in 2019. It was a spur of the moment, lucky decision to buy then. It felt rushed and hard because we were looking at entry level price point (which ~400K back then), and there was lots of competition for those places. We ended up finding a fixer upper in our price range on a busier street. We've always had roommates here which allows us to put more money into the house.

We feel thankful for what we have, but we would LOVE to upgrade to something of a similar size on a less busy street someday. Our observation is that most people that can afford houses now have income from elsewhere (remote workers or family money), and it feels defeating.

I think we need more houses/condos/townhouses in the 1,500 ft size range and to prioritize building those.