Rising housing prices in the United States continue to pressure homeowner affordability, a trend most keenly felt in California, which has 105 cities listing starter homes costing more than $1 million.
Nationwide, a record 242 cities in 26 states now have starter homes listed at or above the $1 million threshold, Zillow researchers stated on June 15. Starter homes are typically smaller, lower-priced residences that meet the limited affordability requirements of first-time homebuyers. Starter home prices averaged $198,649 nationally in the first quarter, up by 1.7 percent from a year earlier, and are usually in the lower third of home values for any given region, Zillow noted.
However, the number of cities where starter homes have surged to the seven-figure mark increased by 7 percent year over year on the strength of an extended run-up in housing prices, the U.S. Federal Housing Finance Agency (FHFA) said. Home values have seen positive annual appreciation each year dating back to the start of 2012, FHFA stated, with year-over-year prices rising in 65 of the largest metropolitan regions in the first quarter of 2026.
“The effects of the pandemic housing boom have proven durable,” Zillow senior economist Kara Ng said.
“A housing shortage a decade in the making, ran headlong into intense demand with mortgage rates at historic lows, driving up home values at a record pace.”
Before 2020, million-dollar starter homes were primarily located in exclusive coastal communities along both coasts, Ng said. Today, Colorado, Texas, Wyoming, and Illinois all have cities with starter homes that cost $1 million or more. California’s number of $1 million starter homes jumped from 52 in February of 2020 to 105 in April of 2026, an increase of 101 percent. New York’s number increased from 12 to 41 in the same time frame, up by 241 percent.
Nationally, there were 80 cities with seven-figure starter homes in February 2020, but that number increased by 202 percent over the past 51 months.
Starter home prices are rising fastest in New Jersey, which went from one city with listings above the $1 million threshold in early 2020 to 26 at the end of April, an increase of 2,500 percent. The Greater New York City Metropolitan region, however, which includes parts of New Jersey and Pennsylvania, had 63 cities with starter homes priced at or above $1 million. Other major metropolitan areas with multiple cities that had starter homes in that range include San Francisco (37), Los Angeles (33), San Jose (13), Miami (8), and Seattle (8).
Despite the rising number of cities with seven-figure starter homes, those residences are still the exception, Zillow’s Ng said.
First-time buyers will fare much better on pricing in Sun Belt and Rust Belt states, Ng said. For the former, a run-up in new housing supply, which includes a glut of multifamily housing units, has helped keep home appreciation moderate compared with other parts of the country.
Six of the top 10 regions for housing affordability are located in the Sun Belt, according to Zillow.