A record 242 U.S. cities now have starter homes priced at $1 million or more, triple the number before the pandemic, according to a Zillow report. The Northeast is the fastest-growing region, with New York and New Jersey adding 15 cities to the list in the past year alone.
The number of U.S. cities where a starter home costs $1 million or more has hit a record 242, Zillow reported in June, up from 80 before the pandemic and 226 a year ago. The Northeast is now the fastest-growing region for these million-dollar starter markets; new construction has chronically lagged there and inventory deficits run deepest.
New Jersey had just one such city before the pandemic; it now has 26. New York rose from 12 to 41. The two states combined added 15 cities in the past year. The New York City metro area leads all metros with 63 cities where a starter home runs $1 million or more. San Francisco follows with 37, Los Angeles with 33, San Jose with 13, and Miami and Seattle with eight each.
California still leads the raw count with 105 cities, but the Northeast is where the crisis is actively spreading. Six of the 10 most competitive housing markets in the country are in the Northeast, according to Zillow's 2026 analysis.
Zillow defines a starter home as one in the lowest third of home values in a given region. As of June, the typical starter home nationwide was worth $198,649, up 1.7% from a year earlier. In well over 200 cities, starter home prices are roughly five times that.
Before 2020, the list was almost entirely coastal; Colorado was the only non-coastal state with a million-dollar starter-home city. Now 26 states have at least one, including Texas, Wyoming and Illinois.
“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,” Zillow senior economist Kara Ng wrote.
The typical age of first-time homebuyers climbed to an all-time high of 40, according to a National Association of Realtors report released in November 2025. The number of first-time homebuyers fell to half the historical norm last July.
“For homebuyers, the prevalence of million-dollar cities significantly—greatly—strains what is already the worst housing affordability since at least the 1980s,” Christopher M. Naghibi, executive vice president and chief operating officer at First Foundation Bank, told Fortune in 2024 when Zillow released a report about the number of U.S. cities with $1 million median-priced homes. “Prospective buyers in these markets face higher barriers to entry, needing ridiculously large down payments and higher incomes to afford homes.”
There are modest signs of relief. Zillow found the typical buyer now breaks even versus renting after about six years, down from more than eight in late 2023. More inventory and slower price growth mean financially prepared buyers are in better shape than they had been. But for a young buyer in 242 cities with million-dollar starter homes, the costs pile up fast: a bigger down payment, a higher monthly mortgage, and a steeper climb before achieving homeownership.
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Number of U.S. cities with $1 million starter homes
cities
Pre-pandemic figure is approximately 2019; starter home defined as lowest third of home values in a region. Source: Zillow via Fortune
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Analysis
Why This Matters
First-time buyers face record barriers: the typical starter home in two dozen states now costs five times the national average, pushing homeownership further out of reach for young families.
The crisis has spread from coastal California deep into the Northeast, transforming once-affordable suburbs into million-dollar markets and reshaping where people can afford to live.
Millennials in their peak household-forming years are delaying milestones like marriage and children, or turning to co-buying and long-term renting as owning a home becomes unattainable.
Background
The pandemic housing boom, fueled by historic low mortgage rates and a decade-long shortage of new construction, drove home values up at a record pace. Starter homes, the cheapest third of homes in a region, have seen the most dramatic price jumps. Before 2020, million-dollar starter cities were almost exclusively in coastal California and a handful of other markets. Now 26 states have at least one, up from nine before the pandemic. Baby boomers, holding paid-off homes or cheap pandemic-era mortgages, have edged younger buyers out of the market in record numbers.
Key Perspectives
Zillow senior economist Kara Ng: “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.”
Christopher M. Naghibi, First Foundation Bank executive vice president: “The prevalence of million-dollar cities significantly—greatly—strains what is already the worst housing affordability since at least the 1980s. Prospective buyers in these markets face higher barriers to entry, needing ridiculously large down payments and higher incomes to afford homes.”
Alexandra Gupta, Corcoran Group real-estate broker: “We're seeing a reshaping of the housing ladder. Some first-time buyers are turning to long-term renting or even co-living models because the idea of owning a home has become so out of reach.”
What to Watch
Whether inventory and price growth continue to ease, drawing the typical buyer break-even period down further from its current six years.
Whether the spread of million-dollar starter cities into non-coastal states like Texas, Wyoming and Illinois accelerates, indicating a national crisis.
How millennial and Gen Z household formation rates shift as affordability constraints delay marriage, children and home purchases.