As housing costs in the U.S. continue to rise, 242 cities now have “starter homes” priced at $1 million or more, according to Zillow. This number has tripled since 2020, driven by a housing shortage, strong demand, and low mortgage rates during the pandemic. A starter home is defined as one in the lowest third of home values in a region. Despite this trend, the typical starter home costs just under $199,000, while the median home price is nearly $418,000. To afford the average home, households need an annual income of about $117,000. California leads with 105 cities having million-dollar starter homes, followed by New York and New Jersey. The Northeast is seeing more of these expensive homes due to unresolved housing shortages, unlike the Sun Belt, which has moderated prices with new supply.
QUESTION: How might the increasing cost of starter homes impact young adults looking to buy their first home?
Hundreds of U.S. cities now have starter homes that cost $1 million
