But there are plenty of places with reasonably-priced homes
April 28, 2025
Key takeaways:
- Half of U.S. states have at least one city where a starter home is$1 million or more.
- California has more cities than any other state with starter homes selling for $1 million or more.
- Even so, there are plenty of more affordable places to move andsigns that prices may be cooling, presenting deals for first-time homebuyers.
First-time homebuyers are seeing eye-poppingprices in hundreds of U.S. cities.
There are now 233 cities where a starter home costs $1 million or more, up from 85 five years ago in 2020, according to an analysis by real-estate website Zillow, which includedhomes in the lowest third of home values in a given region.
“First-time buyers are facing a market where prices that once seemed unimaginable have become reality,” said Kara Ng, senior economist at Zillow, in a statement.
California had the most cities where starter homes cost $1 million or more, with 113 cities, followed by New York (32), New Jersey (20), Florida (11) and Massachusetts (11).
Still, most places have much more reasonably priced homes and there are signs better deals are on the horizon.
Zillow is now predicting that home prices will fall 1.9% in 2025 following rising economic uncertainty that is giving homebuyers cold feet.
Separately, home sellers have been giving concessions, which are deals that lower the total cost of buying a home, at near-record levels.
“The encouraging news for buyers is that starter homes remain well below $1 million in most of the country,” Ng said. “With more homes hitting the market, listings lingering longer, and sellers cutting prices at record rates, buyers are starting to regain some negotiating power.”
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