Million-Dollar "Starter Homes"? First-Time Buyers Face New Reality in 2025
- Neil Caron
- Apr 28
- 2 min read
It’s not your imagination: buying your first home has never been more expensive — especially in certain parts of the country.
According to a new analysis by Zillow, 233 U.S. cities now have average starter home prices exceeding $1 million. That number has more than doubled since 2020, when just 85 cities carried the "million-dollar starter home" label.
Nationwide, however, there’s a silver lining: the typical U.S. starter home still costs around $192,514 — making homeownership attainable in many areas with the right guidance. At ReadySetLoan, we help first-time buyers navigate markets of all kinds with resources, education, and support.
Where Starter Homes Now Top $1 Million
California leads the nation, with 113 cities boasting $1M+ starter homes. In the San Francisco metro area alone, 43 cities make the list, while 34 cities in greater Los Angeles cross the million-dollar mark.
New York follows with 32 cities, and New Jersey has 20.
Florida and Massachusetts each have 11 cities, and Washington has 8.
The pandemic-era housing boom accelerated prices in areas that were once more affordable. For example, in 2020, New Jersey had just two cities with million-dollar starter homes — now it’s twenty.
Overall, 25 states now have at least one city where a starter home costs $1 million or more, compared to only 10 states five years ago.
What Counts as a "Starter Home"?
Zillow defines a starter home as a property in the bottom one-third of home values in a local market. It’s the type of home traditionally seen as a first step for new buyers. But with sky-high price tags in many urban centers, first-time buyers are being priced out — or pushed into smaller, older, or more remote homes.
Yet there’s hope: According to Zillow senior economist Kara Ng, buyers are beginning to regain negotiating power thanks to more listings, slower price growth, and record levels of seller price cuts.
At ReadySetLoan, we’re seeing this shift firsthand. "Even in challenging markets, there are opportunities if you know where to look and what programs to tap into," says the ReadySetLoan team. Whether it’s down payment assistance, first-time homebuyer grants, or negotiation strategies, ReadySetLoan is your educational partner every step of the way.
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