Starter Homes in 233 U.S. Cities Now Cost $1 Million or More

The dream of buying a starter home is slipping away for many Americans. According to new data from Zillow, 233 U.S. cities now have typical starter home prices of at least $1 million — a sharp rise from just 85 cities five years ago.

Zillow’s latest report highlights how dramatically housing costs have surged nationwide, even in regions traditionally seen as relatively affordable. The analysis, based on home values between the 5th and 35th percentiles in each city, shows that half of all U.S. states now have at least one city where the typical starter home crosses the $1 million threshold.

While the national median starter home price remains at $192,514, the study paints a much more troubling picture for buyers in many local markets. States like Rhode Island and Minnesota — not usually associated with sky-high real estate — have now joined the list, reflecting just how widespread the affordability crisis has become.

California Leads the Pack, But the Price Surge Is Spreading

California continues to dominate the list of the most expensive places for starter homes, with 113 cities breaking the $1 million mark. New York follows with 32 cities, and New Jersey with 20. In fact, eight California cities rank among the top 15 priciest areas, where starter home prices often exceed $3 million.

Beyond the usual hotspots, states like Rhode Island and Minnesota are now seeing seven-figure starter home prices for the first time. New Shoreham on Block Island and Minnetonka Beach near Minneapolis both crossed the milestone this year, signaling a broader shift in the U.S. housing market.

In an eye-popping example, Jupiter Island, Florida — known for its celebrity residents like Bill Gates and Tiger Woods — tops Zillow’s 2025 list, with the typical starter home priced at a staggering $5.85 million.

First-Time Buyers Face Steeper Challenges Than Ever

The explosion in home prices comes at a time when first-time buyers are already struggling. The median age of a first-time buyer rose to 38 last year, according to the National Association of Realtors, the highest on record. Meanwhile, first-time buyers made up just 24% of all home purchases — a historic low.

Over the past five years, the median sales price of a U.S. home jumped 42.5%, climbing from $302,487 in March 2020 to $431,078 in March 2025, Redfin reports. Adding to the financial strain are elevated mortgage rates, rising homeowners' insurance costs, and increasing homeowners' association (HOA) fees.

Many prospective buyers have found themselves priced out or forced to put their plans on hold. Virginia resident Lawrence Talej, who backed out of a $315,000 home purchase in 2019 due to maintenance issues, saw home prices in his area jump by over $100,000 since then, making it harder to re-enter the market.

Others, like tech worker Madelyn Driver, have struggled despite strong incomes and remote work flexibility. Driver and her husband, armed with a $700,000 budget, searched across several states but found few homes that matched their expectations for green spaces, vibrant culture, and affordability. "Even in a vast country like the U.S., options that align with our desires are surprisingly out of budget," Driver said.

Owning a Home Doesn’t Always Mean Stability

Even those who manage to buy are facing tough realities. Elsa, a first-time buyer in a Washington, D.C., suburb, said she and her husband rushed into purchasing a $975,000 home in 2022, only to be overwhelmed by mounting repair costs and the financial burden of carrying credit card debt.

"We didn’t anticipate the wave of repairs," Elsa said. "Multiple water leaks and other issues drained our finances far more than expected."

Also Read: Mortgage Demand Crashes as Rates Spike to 6.88%—Homebuyers Pull Back