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

( 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 as of 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.

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

The Housing Shortage in America: Facts and Figures

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 that fall within the bottom third of property 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 U.S. states features starter homes priced at $1 million or more, and this trend has seen an uptick in numerous states within the last year. Currently, New York counts 32 such cities, followed by New Jersey with 20, Florida with 11, and Massachusetts also with 11.

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 others with 48 municipalities 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), and Seattle (8).

Below is the complete list of 10 states featuring the highest number of cities where a $1 million entry-level home is standard, as per Zillow data:

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 bargaining 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 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 of their negotiation leverage,” according to Ng.

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 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. based on data from the National Association of Realtors (NAR) That marks the highest March figure ever recorded, yet it only rose by 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 but remains over double the 3% rates seen during the peak of the pandemic. according to Freddie Mac .

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