The typical “starter home” is worth at least $1 million in 237 U.S. cities, according to a report from Zillow.
Five years ago, there were only 84 such cities.
Zillow defines a “starter home” as one that is in the lowest third of home values in a given region.
Nationwide, the typical starter home is worth $196,611, which is comfortably affordable for a median-income household, Zillows says in its report.
But a housing shortage that worsened over the pandemic helped drive the cost of all homes to new heights. Starter home values have grown 54.1% over the past five years, even more than the 49.1% increase for the typical U.S. home in the same time frame.
“Home buyers are battling affordability and availability today – so much so that $1 million is the norm for a starter home in hundreds of cities,” says Orphe Divounguy, a senior economist at Zillow. “However, it’s looking more and more like there will be some good news ahead for first-time buyers. More homes are for sale, price cuts are on the rise, and buyers have a few more days to weigh their options as homes sit on the market.”
Of the 237 U.S. cities where a typical starter home is $1 million, 117 are in California, 31 are in New York, 21 are in New Jersey, 11 are in Florida and 11 are in Massachusetts.
Photo: Gustavo Zambelli