Zillow says million-dollar starter homes now span 26 states
Starter homes that cost $1 million or more now exist in 242 U.S. cities. The threshold has spread to 26 states, up from 9 before the pandemic.
The first rung of the American housing ladder has begun to disappear in places once considered out of reach only for luxury buyers. Zillow found 242 U.S. cities now have starter homes valued at $1 million or more, a record that nearly tripled from 80 cities in February 2020 and rose from 226 a year earlier.
Zillow defines a starter home as one in the lowest third of home values in a given region, which makes the surge more striking than a simple luxury-market tally. These are not trophy properties; they are the modest homes that typically anchor first-time purchases, give younger households a foothold in the market and help families trade renting for ownership.
The spread now reaches 26 states, up from just 9 before the pandemic. California still has the most million-dollar starter-home cities, while New York and New Jersey have seen the fastest growth. Separate reporting based on the Zillow analysis put California at 105 such cities, New York at 41 and New Jersey at 26, a concentration that shows how far the problem has moved beyond a handful of coastal enclaves.
The national median starter home was worth $198,649, up 1.7% from a year earlier, underscoring that million-dollar starter homes remain the exception across the country. But the exception is no longer rare enough to ignore. A half-million-dollar starter home may still sound extreme in much of the Midwest and South; a million-dollar starter home now defines the market in more and more metros.
Zillow said the trend reflected the lasting effects of the pandemic housing boom, when a housing shortage that had been building for a decade collided with intense demand and historically low mortgage rates. That combination pushed home values higher at a record pace and left many younger buyers with less room to save for down payments, less ability to move near job centers and less access to the kind of ownership that has long built household wealth.
The result is a housing market that is still officially affordable in much of the country, but increasingly inhospitable at the entry level in the places where jobs, schools and family networks are most concentrated. As more starter homes cross the $1 million line, the traditional first purchase is becoming a luxury product in a growing share of America.
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