Hundreds of U.S. cities now have starter homes that cost $1 million

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As U.S. lodging costs continue to climb, 242 cities crossed the state present person "starter homes" costing astatine slightest $1 million, according to Zillow.

The fig of metropolitan areas with basal homes worthy astatine slightest 7 figures has tripled since 2020, the existent property steadfast said successful a new analysis. Zillow defines a starter location arsenic 1 successful the lowest 3rd of location values successful a fixed region.

Home prices surged during the pandemic arsenic a lodging shortage collided with beardown request and historically debased owe rates.

"The pandemic reset the outgo of buying a home, spreading million-dollar starter homes from a fistful of coastal states to much than 2 twelve states crossed the country," Kara Ng, elder economist astatine Zillow, said successful a statement.

To beryllium sure, the emblematic starter location inactive costs acold little than $1 cardinal astatine conscionable nether $199,000, Zillow noted. Overall, the median location costs astir $418,000, according to the National Association of Realtors.

Households request yearly income of nearly $117,000 to spend the mean home, according to Redfin. A household with mean net would request to walk 40% of its income connected the median-priced home, the existent property steadfast found. Experts mostly counsel keeping monthly owe payments to nary much than 30% of yearly income aft putting 15% down.

Soaring existent property prices successful cities crossed California relationship for astir of the high-priced starter homes. The authorities has 105 cities wherever a basal spot costs astatine slightest $1 million, according to Zillow. Pricey starter homes are besides becoming much communal successful the Northeast, Ng said.

"Million-dollar starter homes are popping up successful much Northeast cities due to the fact that the lodging shortage determination hasn't been solved," she said. "Sun Belt markets person responded with caller proviso and seen terms maturation mean arsenic a result. The Northeast hasn't had that relief."

A full of 26 states person astatine slightest 1 metropolis with million-dollar starter homes, up from 9 earlier the pandemic, Zillow found: