A new Zillow report reveals that in 113 cities across California, the cost of a starter home has reached $1 million or more as of March 2025. This marks a significant increase from five years ago when only 54 cities in the state had such high prices for entry-level homes. Nationwide, 233 cities now have million-dollar starter homes, compared to just 85 in 2020.
The report defines a “starter home” as a property in the lowest third of home values in a given region. The rise in prices is attributed to the pandemic housing boom, which has reshaped affordability across the country. Kara Ng, a senior economist at Zillow, stated, “First-time buyers are facing a market where prices that once seemed unimaginable have become reality.”
California leads the nation with the most cities having $1 million starter homes, followed by New York with 32 cities and New Jersey with 20. The New York City metro area tops the list with 48 cities where starter homes cost at least $1 million, followed by the San Francisco metro area with 43 cities.
Despite the high prices, Zillow notes that starter homes remain below $1 million in most parts of the country. With more homes entering the market and sellers reducing prices, buyers are beginning to regain some negotiating power. The report also highlights the increasing demand for single-family rentals as many young households delay homeownership.
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