Entry-level homes now cost at least $1 million in a record 242 US cities, nearly triple the 80 cities recorded before the pandemic, as housing affordability pressures deepen across a wider geographic range.

Key Highlights

  • Million-dollar starter home cities have nearly tripled from 80 in February 2020 to a record 242.
  • California leads with 105 such cities, while New York has grown from 12 to 41 since the pandemic.
  • The median US home now costs close to $418,000, with buyers spending roughly 42% of income on housing.
  • Households need an annual income of nearly $117,000 to afford the average US home.

Entry-level homes now carry a price tag of at least $1 million in a record 242 US cities, according to a property market analysis published June 16, 2026. The figure has nearly tripled from 80 cities recorded in February 2020, with million-dollar starter markets now spread across more than two dozen states, up from just nine before the pandemic.

The analysis defines a starter home as a property in the lowest third of home values in a given region. While the typical starter home nationwide remains priced at roughly $199,000, the $1 million threshold has spread well beyond traditional high-cost coastal markets. A total of 26 states now have at least one city where entry-level homes reach that price point.

California continues to lead with 105 cities where starter homes cost at least $1 million. The strongest growth, however, has been in the Northeast, where housing shortages remain largely unresolved. New York expanded from 12 such cities before the pandemic to 41, while New Jersey grew from one to 26. By metro area, the New York City region leads all US markets with 63 cities at the $1 million starter threshold, followed by San Francisco with 37 and Los Angeles with 33.

The pandemic fundamentally reset home values by combining a long-standing housing shortage with historically low mortgage rates and surging demand, driving prices sharply higher. Sun Belt markets have since seen some moderation as new supply entered the market, but Northeast markets have seen million-dollar starter home counts accelerate due to persistent inventory constraints.

Broader affordability data reinforces the strain on buyers. The median US home now costs close to $418,000, according to figures from a major real estate industry body. Separate data showed homebuyers currently spend roughly 42% of their income on housing costs, and households need an annual income of nearly $117,000 to afford the average home. The cost burden extends further when ongoing expenses are included, with the average homeowner spending close to $24,000 annually on housing costs outside of mortgage payments, rising to approximately $28,000 when association fees are included.

Some conditions are gradually improving for financially prepared buyers. Housing inventory has risen and price growth has slowed in several markets. The typical buyer now reaches the break-even point relative to renting after roughly six years, down from more than eight years in late 2023.

 

This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions.