Million-Dollar Starter Homes Rise in US, Northeast Sees Fastest Growth
A recent Zillow report indicates that a record 242 U.S. cities now feature starter homes priced at $1 million or more, nearly tripling the number from before the pandemic. The Northeast region has become the fastest-growing area for this trend, particularly impacting millennial parents and first-time homebuyers. This development contributes to the worst housing affordability levels seen since at least the 1980s.
A new Zillow report, published on Monday, reveals that a record 242 U.S. cities now have starter homes costing $1 million or more. This figure represents nearly three times the 80 cities that met this threshold before the pandemic and an increase from 226 cities just one year ago.
The Northeast has emerged as the fastest-growing region for million-dollar starter homes. New Jersey, which had only one such city before the pandemic, now has 26. New York's count increased from 12 to 41 cities. Together, these two states added 15 cities to the list in the past year alone. The New York City metro area now leads all regions with 63 cities where starter homes exceed $1 million.
This trend disproportionately affects millennial parents, who are typically in their late 30s and early 40s and often seeking more space. The typical age of a first-time homebuyer has climbed to a record 40, according to a National Association of Realtors report from November 2025, and the share of first-time buyers fell to half the historical norm last July.
Zillow Senior Economist Kara Ng noted that a decade-long housing shortage, coupled with intense demand and historically low mortgage rates, has driven up home values rapidly. This combination has compounded the challenges for buyers in the Northeast, where six of the country's ten most competitive housing markets are located, and new construction has consistently lagged.
Zillow defines a starter home as one in the lowest third of home values in a given region. Nationwide, the typical starter home is valued at $198,649, an increase of 1.7% from the previous year. The prevalence of million-dollar cities significantly strains housing affordability, with Christopher M. Naghibi of First Foundation Bank noting in 2024 that prospective buyers face higher barriers to entry, requiring larger down payments and higher incomes.
Before 2020, most cities with million-dollar starter homes were coastal, with Colorado being the only non-coastal state. Now, 26 states have at least one such city, up from nine before the pandemic, including Texas, Wyoming, and Illinois. California still leads in the total count with 105 cities.
(Source: Fortune)
