Buying your first home used to come at a lower price — now it might require a million bucks and a miracle.
Across 233 US cities, so-called “starter homes” have officially joined the millionaire’s club, turning the American Dream into a luxury listing.
The price of entry-level homeownership has surged to unprecedented heights in many parts of the United States — almost three times as just five years ago, according to new data from Zillow.
These figures underscore the steep affordability challenges facing first-time buyers, who are increasingly priced out of even the lowest-tier properties in their areas.
Zillow classifies “starter homes” as the least expensive homes in a market and those in the bottom third of home values within a given market, which may encompass cities, large suburbs, towns or boroughs within metro regions.
While high price tags are still most common in traditionally expensive states such as California and New York, the trend has begun to creep into markets not historically known for million-dollar listings.
Since 2020, metros in Michigan, Missouri, Kansas and Wyoming have joined the ranks, with Minnesota and Rhode Island also crossing the threshold in the past year.
In total, 25 states now have at least one market where a starter home costs seven figures.
California leads by a wide margin with 113 such cities, followed by New York (32), New Jersey (20), Florida and Massachusetts (11 each) and Washington (8). However, the study does not name the cities in specific.
Still, even states like Texas and Maryland, where home prices were once more moderate, now each have several cities meeting the $1 million mark.
Behind the sticker shock lies a persistent housing shortage that has grown more acute over the past several years.
Construction slowed dramatically during the pandemic, worsening an already tight inventory landscape.
Since 2020, national home values have climbed roughly 45%, Zillow data shows.
Meanwhile, prospective buyers are also contending with elevated mortgage rates, rising homeowners association dues and more expensive insurance premiums.
The result: fewer Americans are managing to buy their first homes.
The median age of a first-time buyer reached 38 in 2024, the oldest on record, while their share of total home purchases fell to a historic low of 24%, according to the National Association of Realtors.