In 237 cities in the U.S., first-time home buyers now have to shell out $1 million to get their foot on the lowest rung of the property ladder. That means homeownership is moving further out of reach in 153 more cities compared to five years ago, a new report from Zillow reveals.
The report defines a starter home as one in the lowest third of home values in a given region. Nearly half the cities where it takes a million bucks to buy a starter home are in California. And half of all states have at least one city in this category. There are 117 such cities in California, 31 in New York state, 21 in New Jersey, and 11 each in Florida and Massachusetts.
The metro with the most such cities is the New York City-New Jersey-Pennsylvania area, which contains 48. It is followed by the San Francisco metro (44 cities) and Los Angeles (35). Behind them are San Jose (15), Miami (eight) and Seattle (eight).
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Nationwide, outside these areas, the typical starter home costs $196,511. "Starter home values have grown 54.1% over the past five years, even more than the 49.1% increase for the typical U.S. home in the same time frame. This has delayed the first home purchase for many," Zillow commented, with the median age of the first-time buyer rising to 35, compared to 34 in 2019. But they could be in for an easier time ahead.
"More homes are for sale, price cuts are on the rise, and buyers have a few more days to weigh their options as homes sit on the market," said Zillow senior economist Orphe Divounguy.
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