The number of cities where a typical starter home is worth $1 million or more has grown from 85 five years ago to 233 today, according to a Zillow analysis.
Zillow defines a starter home as being homes in the lowest third of home values in a given region.
Nationally, the average starter home is worth $192,514, but this price tag is increasing, indicating how the pandemic housing boom has reshaped affordability, according to Zillow.
"First-time buyers are facing a market where prices that once seemed unimaginable have become reality," Zillow Senior Economist Kara Ng said in a statement. "The encouraging news for buyers is that starter homes remain well below $1 million in most of the country. With more homes hitting the market, listings lingering longer, and sellers cutting prices at record rates, buyers are starting to regain some negotiating power."
Because of growing home prices, young households are postponing homeownership, according to Zillow. The median age of a renter has risen to 42 years old, driving up demand and prices for single-family rentals.
Read the full report here.
