3 minEconomy
Starter homes in a record 242 US cities now cost $1 million
Zillow's June report finds 242 US cities where starter homes sell for at least $1 million, up from 226 a year earlier, with the Northeast driving much of the growth as first-time buyers struggle to enter the market.
A record 242 cities across the United States now have starter homes priced at $1 million or more, according to a June report from Zillow. That is up from 226 a year earlier and roughly 80 before the pandemic. The figures point to a housing affordability squeeze that has reached the entry-level segment, the homes that have traditionally given first-time buyers a foothold in the market.
The Northeast is the fastest-growing region for million-dollar starter homes. New Jersey had one such city before the pandemic and now has 26. New York rose from 12 to 41. Together, the two states added 15 cities over the past year. The New York City metro area leads all metropolitan areas with 63 cities where starter homes reach seven figures. Six of the 10 most competitive housing markets in Zillow's 2026 analysis are in the Northeast.
California still has the largest raw count, with 105 cities. San Francisco accounts for 37, Los Angeles for 33 and San Jose for 13. Miami and Seattle have eight each. The number of states with at least one such city has risen from nine to 26 since the pandemic, showing that the trend has spread well beyond the traditionally expensive coastal markets.
Several forces are behind the shift. The pandemic-era housing shortage, record demand and historically low mortgage rates pushed prices up sharply. In the Northeast, new construction has lagged, and the inventory deficit is deepest there. Meanwhile, many baby boomers hold paid-off or low-rate mortgages taken out before 2020, which limits how many homes come up for sale.
The effect on younger buyers is visible in the data. The share of first-time buyers has fallen to half its historical norm, and the typical first-time buyer's age reached a record 40, according to the National Association of Realtors' November 2025 report. Young buyers face large down payments and higher monthly costs than previous generations did at the same stage of life.
The national picture is less dramatic than the city-level numbers. The typical US starter home is valued at $198,649, up 1.7 percent from a year earlier. Zillow estimates that the break-even point for buying compared with renting has fallen to about six years, down from more than eight in late 2023. The report also notes some signs of easing, including more inventory coming onto the market and slower price growth. Whether those trends continue will determine how many first-time buyers can get a home in the cities where the price tag has now reached the million-dollar mark.
Source: fortune.com
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