Starter Homes Now Cost Over $1 Million in These U.S. Cities, Report Reveals

( NewsNation In over 230 U.S. cities, $1 million barely covers the cost of an entry-level house, as stated in a recent study.

A Zillow analysis discovered that the average "entry-level house" was valued at $1 million or more in 233 cities by March. This represents a significant increase from five years prior, during which only 85 cities boasted entry-level properties priced at seven figures or above.

"First-time buyers are encountering a market where prices that were once unthinkable have now turned into reality," Kara Ng, senior economist at Zillow, stated in a release.

The Housing Shortage in America: Statistics Revealed

Across the country, the average entry-level home remains fairly manageable at $192,514. However, Zillow’s research highlights the significant price increases in numerous regions that have occurred since the onset of the pandemic.

Zillow characterized starter homes as properties with valuations placing them in the bottom third for a specific area.

In which U.S. states can you find the highest number of entry-level properties priced at over $1 million?

California tops the country with 113 municipalities where entry-level houses exceed $1 million, yet expensive property markets have expanded outside of California.

At least one city in half of all US states features entry-level properties priced at more than $1 million. The count of these high-priced urban areas has gone up across numerous states within the last twelve months; for instance, New York now counts 32 such cities, followed by New Jersey with 20, then Florida and Massachusetts each reporting 11 cities in this category.

A lot of these cities are grouped together within the same area.

Here are the top housing markets for 2025 according to Zillow:

According to Zillow, the New York City metropolitan area, encompassing sections of New Jersey and Pennsylvania, topped all regions with 48 areas where a standard entry-level home has a price tag of at least $1 million.

The San Francisco subway system had the second highest number with 43, trailed by Los Angeles (34), San Jose (16),Miami (8), andSeattle (8).

Below is the complete list of 10 states featuring the highest number of cities where a $1 million entry-level home is now typical, as reported by Zillow:

1. California: 113 cities
2. New York: 32 cities
3. New Jersey: 20 cities
4. Florida: 11 cities
5. Massachusetts: 11 cities
6. Washington: 8 cities
7. Texas: 7 cities
8. Connecticut: 4 cities
9. Hawaii: 4 cities
10. Maryland: 4 cities

Homebuyers gaining negotiating power

As mortgage rates rise, prices soar, and inventory increases, homebuyers are beginning to acquire more negotiating power in certain real estate markets.

First-time buyer houses remain significantly under $1 million across much of the nation, with the count of such locations decreasing from 239 at the beginning of 2025, as pointed out by Zillow.

Ng stated, “As an increasing number of properties enter the market, listings remain available for longer periods, and sellers slash prices at unprecedented levels, buyers are beginning to reclaim some negotiation leverage.”

A recent Redfin report discovered that 44% of sellers provided incentives to buyers during the initial quarter, an increase from 39% in the previous year. Concessions were notably more common in urban areas such as Seattle (71%) and Portland, OR (64%).

Forty-four percent of home sellers are offering incentives to buyers, according to Redfin.

Nationally, home prices keep increasing; however, the rate of growth has decelerated lately. In March, the median cost for previously owned homes reached $403,700. as reported by the National Association of Realtors (NAR) That marks the highest March figure ever recorded, yet it rose only 2.7% compared to the previous year — the lowest yearly gain since August.

Separate Redfin data As of data through April 20, the average home sale price has decreased in 11 key metropolitan areas, showing the most significant yearly drops in San Antonio (-3.7%), Oakland, California (-3.5%), and Jacksonville, Florida (-2.2%).

Last week, the average 30-year fixed mortgage rate fell to 6.81%, which is lower than the 7.17% recorded a year earlier, though it remains over double the 3% rates observed during the peak of the pandemic. according to Freddie Mac .

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