Market Data + Trends

In More Than 200 US Cities, a Starter Home Costs $1 Million

This trend is most common in more expensive states such as California and New York
July 26, 2024

Between rising home costs and an ongoing housing shortage, even starter homes are becoming unaffordable for most first-time homebuyers. According to housing market platform Zillow, there are now 237 U.S. cities where a starter home costs at least $1 million. Five years ago, just 84 cities had such high prices for entry-level homes. Nearly half of the cities with $1 million starter homes are in California, which leads with 117 cities, followed by New York and New Jersey, which each have 31 and 21 cities with starter homes for over $1 million, respectively. Major metropolitan areas such as New York City, San Francisco, and Los Angeles have the highest counts of million-dollar starter homes.

Nationwide, the typical starter home is worth $196,611, which is comfortably affordable for a median-income household. However, starter home values have grown 54.1% over the past five years, even more than the 49.1% increase for the typical U.S. home in the same timeframe. That has delayed the first home purchase for many. The median age of a first-time home buyer was 35 last year, a year older than in 2019.

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