More than 200 cities have $1 million starter homes

In more than 200 U.S. cities, the average starter home for sale is worth $1 million or more. The cost of housing has skyrocketed during the pandemic, driven by a housing shortage, increased demand and rising inflation. A new report from Zillow found that in some markets, the average starter home is far more expensive than the average American can afford.

According to Zillow, a starter home is in the bottom third of home values in a given region.

Five years ago, there were only 84 cities where the typical starter home was worth $1 million. Between 2019 and 2024, starter home values rose 54.1%, helping many young Americans delay buying their first home.

Change is coming for potential first-time homeowners: There is an increasing number of homes on the market, giving buyers more time to consider their options. A rising housing inventory can also give buyers more negotiating power.

“The share of inventory that is smaller and more affordable has grown, which is helping to keep the median price low even as prices per square foot continue to rise,” said Danielle Hale, chief economist for Realtor.com. “Some very welcome news for potential buyers.”

The typical starter home is worth $196,611. The real estate agency called this price “Comfortably affordable for a middle-income household.”

California to Texas: Moving from California to Texas can save a million dollars. Many Americans choose to do so.

About half of the cities with $1 million starter homes are in California

Of the 237 cities with $1 million starter homes, half are in California. New York has 31 cities with expensive starter homes, followed by New Jersey (21 cities).

Between 2019 and 2024, the number of California cities with million-dollar starter homes will more than double.

Zillow said that markets associated with lower homeownership rates tend to have more expensive starter homes. The same goes for markets with restrictive building codes. Lower inventory is reflected in more expensive housing markets.

California has one of the most expensive housing markets in the US

Last year, the California Community Poll found that 4 in 10 Californians are considering moving to another state, with the majority saying it is too expensive to live there. While the poll found that the majority of Californians like living in the state, the rising cost of living is the top reason people are moving.

About 64% of the Golden State’s counties have a median home value above the national median of $389,800. Four of the five most expensive counties in the U.S. based on median home price were in California.

County-level housing statistics data from the American Community Survey shows how much homes are worth across California.

Cost of living: Nearly half of California residents are considering leaving the state,

Outside of California, Massachusetts ranks in the top five counties with the highest average home prices:

Santa Clara County, California: $1,583,130
San Mateo County, California: $1,573,470
Marin County, California: $1,454,450
San Francisco County, California: $1,332,660
Nantucket County, Massachusetts: $1,313,450

Logan Mohtashami, principal analyst for HousingWire, a trade publication for mortgage, real estate and housing professionals, previously told USA TODAY that California has been ineffective in lowering the cost of living because not enough homes are being built. That means there is more demand for homes than supply.

Mohtashami called the housing market unhealthy. “We still have too many people chasing too few homes,” he said. “California is going to be a tug of war. Can they keep enough people here? Or are more people just going to keep leaving?”

Contributors: Medora Lee, Itzel Luna, USA TODAY