Starter homes now cost $1 million or more in 233 U.S. cities, nearly triple the number from five years ago, underscoring a nationwide affordability crisis that’s reshaping the future of American homeownership.
At a Glance
- The number of cities with $1 million starter homes rose from 85 to 233 in five years
- California alone accounts for 113 of those cities, followed by New York (32) and New Jersey (20)
- Despite this, the nationwide median value of a starter home remains under $200,000
- The median age of a first-time buyer hit a record 38 in 2024, with their market share falling to 24%
- High prices are spreading to states like Minnesota, Michigan, and Rhode Island
$1 Million to Start: The New Reality
Zillow’s latest data reveals that starter homes—defined as the most affordable third of a housing market—now exceed one million dollars in 233 U.S. cities. That’s nearly triple the count from just five years ago, when such price tags were limited largely to major metros. Today, entire swaths of California, the New York tri-state area, and parts of New England are effectively out of reach for first-time buyers.
Even more troubling, the $1 million figure applies not to luxury estates but to homes historically considered accessible entry points for new homeowners. As CNBC confirms, these are the homes where many Americans begin building equity, families, and financial stability.
Watch a report: The Crisis of $1 Million Starter Homes.
A Spreading Crisis, Not Just a Coastal One
While historically concentrated in coastal enclaves, the affordability crisis has spread to 25 states. Cities in Minnesota, Michigan, Missouri, and Kansas now appear on the $1 million list. “First-time buyers are facing a market where prices that once seemed unimaginable have become reality,” said a Zillow spokesperson.
The Covid-era housing boom drove nationwide prices up 45%, while persistent underbuilding and regulatory hurdles continue to constrain supply. Mortgage rates hovering near 7%, rising insurance costs, and bloated HOA fees further erode affordability. With the median age of renters now at 42, the U.S. housing ladder appears more like a wall.
Is There a Way Out?
Some recent trends offer a glimmer of hope. According to Zillow, the number of $1 million starter-home cities has dropped slightly from 239 at the start of the year, thanks to longer listing times and more sellers cutting prices. The company has also introduced tools like its BuyAbility℠ calculator and down payment aid modules to help frustrated buyers strategize.
But even with such assistance, the long-term outlook remains grim without broader intervention. The housing supply remains severely constrained, and state and local zoning policies continue to inhibit large-scale residential construction. Meanwhile, homeownership—a traditional engine of generational wealth—has become increasingly elusive. The median age of first-time buyers hit a record high of 38 last year, and their share of all purchases fell to just 24%.
Absent sweeping reform, today’s starter homes may remain forever out of reach for millions, turning the American Dream into an increasingly expensive illusion.
