Where starter homes cost at least $1 million
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There are now 233 U.S. cities where a typical starter home costs at least $1 million — nearly triple the number from March 2020, according to a Zillow report.
Why it matters: It's a sharp reminder that homeownership is slipping further out of reach, especially for younger people.
- The median age of first-time buyers is pushing 40, the oldest on record, data shows.
The big picture: Half of all states have at least one city with million-dollar starter homes, up from 10 states five years ago, Zillow found.
- Minnesota (Minnetonka Beach) and Rhode Island (New Shoreham) recently joined the list. California cities continue to dominate.
The latest: Home prices are still climbing, though not as quickly as before, and mortgage rates remain stubbornly high.
- The median existing home price rose 2.7% to $403,700 in March, the 21st straight month of year-over-year increases, per the National Association of Realtors.
What they're saying: "While cities with $1 million starter homes still represent a small piece of American real estate, they are a striking symbol of how the pandemic housing boom reshaped affordability," Zillow's Anushna Prakash wrote in the report.
What we're watching: Some may skip starter homes altogether.
- Roughly 2 in 3 Gen Z renters and 3 in 5 millennial renters say buying a starter home and upsizing later "makes no sense anymore," according to new research by BMO bank.
