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In more than 230 US cities, including California’s 113, just $1 million is enough for a starter home, according to a new report.
Zillow’s analysis found that as of March, a typical “starter home” is worth at least $1 million in 233 cities. This is a pretty jump from five years ago when only 85 cities had a $1 million starter home.
“First-time buyers face a market where prices that once seemed unimaginable have become a reality,” Kara Ng, senior economist at Zillow, said in a statement.
Nationally, the typical starter home is still relatively affordable at $192,514, but Zillow’s findings highlight how dramatically prices have skyrocketed in many regions since the pandemic.
Zillow defined a starter home as a starter home with at least one third of the home values in the region.
Which state has a million dollar starter home?
California leads the country in 113 cities where starter homes cost $1 million, but expensive real estate is spreading beyond the Golden State.
Half of US states have at least one city with a million dollar starter home, and the number of such cities has increased in several states over the past year, with New York now at 32, New Jersey now at 20, Florida 11 and Massachusetts now at 11.
Many of these cities are converged in the same area.
According to Zillow, the New York City metro area, which includes parts of New Jersey and Pennsylvania, led all the metros in 48 cities that cost more than $1 million to a typical starter home.
San Francisco Metro had the next best count with 43, followed by Los Angeles (34), San Jose (16), Miami (8) and Seattle (8).
According to Zillow, this is the complete list of 10 states with the most cities where the $1 million starter home is now the norm.
California: 113 New York: 32 New Jersey: 20 Florida: 11 Massachusetts: 11 Washington: 8 Texas: 7 Connecticut: 4 Hawaii: 4 Maryland: 4
Home buyers gaining negotiation skills
With rising mortgage rates, high prices in the sky and rising stocks, home buyers are beginning to gain leverage in some markets.
Starter homes are still well below $1 million for most of the country, and the number of cities meeting that standard has fallen from 239 in early 2025, Zillow noted.
“As more homes crash into the market and the list continues for longer and longer, buyers are beginning to regain the power of negotiations as sellers cut prices at record rates,” says Ng.
A recent Redfin report found that 44% of sellers made concessions to buyers in the first quarter. This is up from 39% the previous year. Cities like Seattle (71%) and Portland (64%) had much higher percentages of sellers offering concessions.
Home prices continue to rise nationwide, but the pace has slowed down recently. According to the National Association of Realtors (NAR), the median existing selling prices for March reached $403,700. This is the record high in March, but it has only increased by 2.7% from a year ago. This is the smallest increase in the year since August.
Separate Redfin data through April 20 shows typical home sale prices have fallen in 11 major metros, with the biggest year-over-year declines in San Antonio, Oakland, California (-3.7%) and Jacksonville, Florida (-2.2%).
According to Freddie Mac, the average 30-year fixed mortgage rate fell to 6.81% from 7.17% last week, but it fell more than twice the 3% level during the pandemic era.
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