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

( NewsNation In over 230 U.S. cities, $1 million barely buys 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 as of March. This represents a significant increase compared to five years prior, when only 85 cities boasted entry-level 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, the senior economist at Zillow.

America’s Housing Shortage in Numerical Terms

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 following the onset of the pandemic.

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

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 U.S. states features entry-level properties priced above $1 million. The count of these high-priced urban areas has grown in numerous states within the last twelve months; notably, New York stands at 32, New Jersey counts 20, Florida reports 11, and Massachusetts also tallies up to 11 such locations.

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 second highest was recorded in the San Francisco metro with 43, trailed by Los Angeles (34), San Jose (16), Miami (8), and Seattle (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 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 increase, prices soar, and inventory grows, homebuyers are beginning to exert more influence 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 observed by Zillow.

“As more properties become available, listings stay on the market for longer periods, and sellers are reducing their prices at unprecedented levels, buyers are beginning to reclaim some negotiation leverage,” according to Ng.

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 concessions to buyers, according to Redfin.

Nationally, home prices keep increasing, though the rate of growth has decelerated lately. In March, the median cost for existing 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 year-over-year 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%, dropping from 7.17% recorded in the previous year, yet it remains over double the 3% rates observed during the peak of the pandemic. according to Freddie Mac .

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