With housing affordability weighing heavily on the minds of U.S. home buyers, a new report isn’t moving the needle in the right direction in a new record number of cities that now have starter homes beginning at a minimum of $1 million.
According to new analysis from Zillow, the number of cities with $1 million starter homes has nearly tripled since before the pandemic, rising from 80 in February 2020 to a record 242 today. Nationwide, the typical starter home is worth $198,649, up 1.7% from a year ago, according to Zillow.
Zillow writes a typical “starter home” is defined for this analysis as a home in the lowest third of home values in a given region.
The effects of the pandemic housing boom have proven durable. A housing shortage, a decade in the making, ran headlong into intense demand amid historic lows in mortgage rates, driving up home values at a record pace, Zillow writes. But while plenty of markets are still feeling the pinch of this price reset, conditions are slowly becoming friendlier for buyers: The typical home buyer now breaks even relative to renting after roughly six years, down from more than eight years in late 2023, according to the latest analysis.
“The pandemic reset the cost of buying a home, spreading million-dollar starter homes from a handful of coastal states to more than two dozen states across the country,” said Kara Ng, senior economist at Zillow. “But while it may feel like a market of beer tastes at champagne budgets, those million-dollar starter homes are still the exception. More inventory, slower price growth and a narrowing rent-versus-buy gap mean buyers who are financially prepared are generally in better shape than in recent years.”
California still leads overall with the most cities—105—with $1 million starter homes, according to Zillow, and 26 states now have at least one city with million-dollar starter homes, up from nine before the pandemic. Before 2020, this list was made up almost entirely of coastal states; Colorado was the only interior state with a million-dollar starter home city. Now, Texas, Wyoming and Illinois, among others, have multiple such cities.
New York and New Jersey are the fastest-growing states on the list, adding 15 cities combined in the past year, Zillow reports. New York’s total has reached 41—up from just 12 before the pandemic—while New Jersey’s has grown to 26, up from only one. The pattern mirrors what Zillow found in its 2026 hottest markets analysis: Six of the 10 most competitive housing markets in the country are in the Northeast, where new construction has lagged and inventory deficits run deep, Zillow stated.
“Million-dollar starter homes are popping up in more Northeast cities because the housing shortage there hasn’t been solved,” said Ng. “Sun Belt markets have responded with new supply and seen price growth moderate as a result. The Northeast hasn’t had that relief. Eliminating barriers to building like restrictive zoning is the most direct path to improvement, which is something Zillow is actively advocating for across the country.”
The New York City metro area, which includes parts of New Jersey and Pennsylvania, leads all metro areas with 63 cities where a typical starter home costs $1 million or more. The San Francisco metro follows with 37, then Los Angeles (33), San Jose (13), Miami (8) and Seattle (8), according to the report.
For more information, visit https://www.zillow.com/research/million-dollar-starter-home-36452/.
