A $1 million starter home is now the norm in more than 200 US cities

The number of US cities where first-time homebuyers are faced with at least a $1 million price tag on the average entry-level home has nearly tripled in the past five years, according to new research.

The number of US cities where first-time homebuyers are faced with at least a $1 million price tag on the average entry-level home has nearly tripled in the past five years, according to new research. A Thursday report from Zillow indicates that a typical starter home is now worth $1 million or more in 237 cities, up from 84 cities in 2019, underscoring America’s ongoing home affordability crisis. “Affordability has been strained across the board,” Orphe Divounguy, a senior economist at Zillow, said. “We see the largest number of million-dollar starter homes in expensive coastal markets. We see them in markets with very low homeownership rates and we see them in markets with more building regulations.” Zillow defines a “starter home” as being among those in the lowest third of home values in a given region. California, New York and New Jersey contain the highest number of cities with entry-level homes that carry an average million-dollar price tag, but half of all US states have at least one such city, the report said. Skyrocketing home prices, along with elevated mortgage rates, have contributed to a feeling of frustration among most Americans about the housing market. A majority of Americans — 76% — say it’s a bad time to buy a house, according to a May survey from Gallup. It’s a problem, partly, of supply and demand: There is a shortage of homes for sale compared to demand, which has driven up prices.