Rising housing prices in the United States continue to pressure homeowner affordability, a trend most keenly felt in California, which has 105 cities listing starter homes costing more than $1 million.
Nationwide, a record 242 cities in 26 states now have starter homes listed at or above the $1 million threshold, Zillow researchers stated on June 15. Starter homes are typically smaller, lower-priced residences that meet the limited affordability requirements of first-time homebuyers. Starter home prices averaged $198,649 nationally in the first quarter, up by 1.7 percent from a year earlier, and are usually in the lower third of home values for any given region, Zillow noted.
However, the number of cities where starter homes have surged to the seven-figure mark increased by 7 percent year over year on the strength of an extended run-up in housing prices, the U.S. Federal Housing Finance Agency (FHFA) said. Home values have seen positive annual appreciation each year dating back to the start of 2012, FHFA stated, with year-over-year prices rising in 65 of the largest metropolitan regions in the first quarter of 2026….