Million-Dollar Starter Homes
Zillow Reports Record 242 U.S. Cities Now Have $1 Million Starter Homes
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A record 242 U.S. cities now have starter homes priced at $1 million or more, according to new data from Zillow. That is up from just 80 cities before the pandemic — a tripling in only a few years.
The national typical starter home still costs $198,649, up 1.7% from a year ago. But in 26 states, at least one city has crossed the million-dollar threshold for entry-level homes — up from just 9 states in 2020, Zillow reports.
How the Pandemic Reset Entry-Level Home Prices
Before COVID-19, million-dollar starter homes were rare. They existed mostly in a handful of coastal cities. Then, in 2020 and 2021, mortgage rates dropped to historic lows. Buyers flooded the market. Home values surged nearly everywhere, according to Zillow.
That surge never fully reversed. Zillow Senior Economist Kara Ng said, "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." California alone now has 105 of the 242 cities on the list.
Locked-Out Buyers Face a Shrinking Window
First-time buyers are getting squeezed from two sides: high prices and tight supply. Homeowners who locked in 3% mortgage rates in 2020 and 2021 have refused to sell. That has kept inventory low and prices high. A typical household now spends 40% of its income on a median-priced home — well above the recommended 30%, according to CBS News.
The median age of a first-time buyer has climbed from 30 in 1990 to 40 in 2025, according to Realtor.com. Buyers who miss their window pay a steep price. Those who cannot buy by age 30 miss out on an estimated $119,000 in net worth by age 50.
The Northeast Bears the Brunt of the Crisis
The problem is worst in the Northeast, where new construction has not kept up with demand. Builders face strict zoning rules, slow permitting, and high costs. The National Association of Home Builders says government regulation now adds more than 26% to the price of an average single-family home.
Ng said Sun Belt cities like Jacksonville and St. Louis are faring better because builders there have added more supply. But in California and the Northeast, Ng said, the entry-level market remains "financially insurmountable" for most buyers without family wealth or major outside help.
Congress Moves on Housing Bills as Voters Demand Action
Housing has become one of the top political issues of 2026. A poll from the National Association of Realtors found that 89% of voters want Congress to pass laws making housing more affordable. Only 17% of Americans say now is a good time to buy a home.
In May 2026, the House passed the 21st Century ROAD to Housing Act by a sweeping 396-13 vote. The bill targets supply shortages and regulatory barriers. A household needs to earn roughly $117,000 a year to afford the average home, according to Redfin — a bar most first-time buyers cannot clear.
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