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

( NewsNation In over 230 U.S. cities, $1 million merely suffices for 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, when only 85 cities boasted starter homes priced at over a million dollars.

"First-time buyers are encountering a market where prices that were previously thought to be inconceivable have now turned into reality," stated Kara Ng, senior economist at Zillow.

The U.S. Housing Shortage Detailed Through Statistics

Across the country, the average entry-level home remains reasonably priced at $192,514. However, Zillow's research highlights the significant increase in property values in numerous regions since the start of the pandemic.

Zillow characterized starter homes as properties falling within the bottom third of value ranges in their respective areas.

In which U.S. states can you find the highest number of entry-level houses 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 U.S. states features entry-level properties priced at more than $1 million, and this trend has expanded across multiple states within the last year. Currently, New York boasts 32 such cities, followed by New Jersey with 20, Florida with 11, and Massachusetts also with 11 cities.

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 region, encompassing areas of New Jersey and Pennsylvania, topped all regions with 48 neighborhoods where a standard entry-level house has a price tag of at least $1 million.

The San Francisco subway system came second with a total of 43, trailed by Los Angeles (34), San Jose (16),Miami (8), andSeattle (8).

Below is the complete list of the 10 states featuring the highest number of cities where a $1 million entry-level home is now commonplace, 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 increase, prices soar, and inventory grows, 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 come onto the market, listings stay 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 concessions 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 values keep climbing; however, the rate of increase has decelerated lately. During March, the median cost for previously owned homes reached $403,700. based on data from 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 April 20, data indicates that the average home sale price has decreased in 11 key metropolitan areas, with the most significant yearly drops observed 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%, dropping from 7.17% recorded at this time last year, yet remaining over double the 3% rates observed during the peak of the pandemic. according to Freddie Mac .

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