Overview
- Zillow’s analysis, released Monday, found a record 242 U.S. cities where a typical starter home—the bottom third of regional values—now costs $1 million or more.
- By Zillow’s definition a starter home sits in the lowest third of local home values, and the typical starter home nationwide is about $198,649.
- California leads with 105 such cities, New York has 41 and New Jersey 26, and a total of 26 states now contain at least one city with million-dollar starter homes.
- Zillow says the shift stems from a pandemic-era boom driven by a long-running housing shortage, strong demand and low mortgage rates, with Northeast markets hardest hit because new construction has lagged while some Sun Belt areas eased where builders added supply.
- Zillow notes modest recent easing in rent-versus-buy math—buyers now break even with renting in roughly six years—and urges zoning and building reforms to expand supply as the main way to restore affordability.