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A record 242 U.S. cities now have starter homes priced at $1 million or more, according to recent housing market research. That number has tripled from just 80 cities before the pandemic.
California leads with 105 cities, followed by New York (41) and New Jersey (26). The New York City metro area has the most million-dollar starter home cities of any metro in the country, with 63 total.
Despite these rising numbers, in the big picture, this is still a concentrated geographic trend, not a national norm. Nationally, the average starter home, defined as homes in the lowest third of local home values, remains about $200,000.
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Where a $1 million home is the starting point
The concentration is striking. California has more million-dollar starter home cities than any other state: 105 as of April 2026, driven by decades of constrained housing supply and some of the most in-demand labor markets in the world. But the fastest growth is now happening in the Northeast, where New York has reached 41 cities (up from just 12 before the pandemic) and New Jersey has climbed to 26 (up from a single city).
At the metro level, the picture looks like this:
| Metro area | Cities with $1M+ starter homes |
|---|---|
| New York City (incl. NJ/PA) | 63 |
| San Francisco | 37 |
| Los Angeles | 33 |
| San Jose | 13 |
| Miami | 8 |
| Seattle | 8 |
Before 2020, this list was almost entirely coastal. Colorado was the only interior state with a million-dollar starter home city. Today, Texas, Wyoming, and Illinois all have multiple cities on the list. Twenty-six states now have at least one.
The reason the Northeast is growing fastest isn’t just demand. It’s supply. Sun Belt markets responded to the pandemic price surge with new construction, which moderated price growth. The Northeast hasn’t had that relief. New building permits in New York and New Jersey have lagged far behind population and demand growth, keeping prices elevated even as some coastal markets begin to cool.
What a $1 million home actually costs at today’s mortgage rates
The price tag is one number. The monthly reality is another. Here’s what a $1 million purchase looks like at today’s 6.54% 30-year fixed rate, assuming a 20% down payment ($200,000):
| Cost component | Estimate |
|---|---|
| Loan amount (20% down on $1M) | $800,000 |
| Monthly P&I at 6.54% | ~$5,075 |
| Property taxes (CA/NY estimate, annual) | $10,000–$20,000+ |
| Homeowners insurance (annual) | ~$2,500–$4,000 |
| Estimated all-in monthly payment | ~$6,200–$7,400 |
The above example is for illustrative purposes only. Actual monthly payments will vary based on loan amount, interest rate, loan term, property taxes, homeowners insurance, and other factors. Contact a mortgage professional for a personalized estimate.
The income math is equally stark. To keep housing costs at 28% of gross income, a standard front-end DTI guideline, a household would need to earn roughly $217,500 per year to handle the P&I payment alone. At the more lenient 36% back-end threshold (assuming no other significant debt), the floor drops to around $169,000. At today’s rates and prices, a $1M home requires a dual-income household in most cases.
There’s also a loan structure question. In most of the country, the 2026 FHFA conforming loan limit is $832,750. An $800,000 loan on a $1M purchase falls just under that ceiling. But in many high-cost counties in California and New York, the purchase price itself pushes the loan into jumbo territory. Understanding the difference between a jumbo vs. conventional loan matters before you start the application process, since jumbo loans carry stricter credit and reserve requirements.
Use our mortgage calculator to estimate your mortgage payment based on your actual down payment, loan amount, and rate.
Where starter homes are still affordable
The million-dollar starter home story is real, but it’s a local story, not a national one. For buyers with flexibility, a meaningful alternative exists.
Recent affordability research ranked U.S. states by how accessible homeownership is for median-income households. The top five: Indiana, Iowa, South Carolina, Texas, and North Carolina. Twelve of the top 13 states are in the Midwest or South.
Several of these markets have seen significant population and job market growth. Remote workers with geographic flexibility have more options than the coastal housing headlines suggest.
That said, most people can't just move to a more affordable market. So here are some strategies to help buy a home in an expensive city.
Five strategies if you’re priced out of your market
Add a co-borrower
Adding a co-borrower combines income for qualification purposes and can dramatically change what you’re eligible to borrow. A household earning $180,000 combined may qualify for a loan that neither borrower could access alone at $90,000. Before adding a co-borrower, understand both their credit profile and how their existing debts affect the combined debt-to-income calculation. Our guide to adding a co-borrower covers the mechanics.
Buy down the rate
Discount points let you pay cash at closing to reduce your interest rate, typically 0.25% per point, at a cost of 1% of the loan amount. On an $800,000 loan, one point costs $8,000 and reduces the monthly P&I by roughly $130. That math works if you plan to stay in the home long enough for the monthly savings to recoup the upfront cost. Buying down your rate is worth modeling before you commit.
Look at adjacent markets within the metro
Not every city in a high-cost metro commands the million-dollar premium. In the New York metro’s 63 affected cities, surrounding counties and townships vary significantly. In the LA metro, a 30-minute commute can shift the entry price by $200,000 or more. Before assuming you must buy at the top of your market, map out the full geographic range you’re willing to consider.
Understand the rent-vs-buy math for your specific market
Recent research suggests that nationally, buyers now break even relative to renting after about six years, down from more than eight years in 2023. That break-even timeline varies sharply by city. Knowing how much of your income should go toward a mortgage is the starting point for this comparison in your specific market.
Get pre-approved before you set a price ceiling
Pre-approval tells you what you can actually borrow, based on your credit score, income, down payment, and debt profile. Buyers often discover their real ceiling is different from their assumed ceiling. Getting pre-approved before you seriously shop gives you accurate data to make decisions with. For a broader view of the qualification levers, our guide to how to afford a million-dollar home goes deeper on the strategies. Our guide to how to qualify for a mortgage is also a useful foundation. Understanding how much you need for a down payment early in the process helps too.
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Frequently asked questions
What is a starter home and how much does one cost in 2026?
A starter home is typically defined as a home in the lowest third of home values within a given local market, not a fixed national price point. Nationally, the average starter home is worth about $198,649 in 2026, up 1.7% from a year ago. In expensive markets, that same ‘starter’ tier can exceed $1 million because it represents the cheapest available homes in that local market, even if those homes would be considered luxury properties elsewhere.
Which cities have starter homes that cost $1 million or more?
As of April 2026, 242 U.S. cities have starter homes priced at $1 million or more. California has the most with 105 cities, followed by New York (41) and New Jersey (26). The New York City metro area leads all metros with 63 such cities. Other metros with significant counts include San Francisco (37), Los Angeles (33), San Jose (13), Miami (8), and Seattle (8). Twenty-six states now have at least one million-dollar starter home city.
How much income do I need to buy a $1 million home?
At today’s 6.54% rate with 20% down, the principal and interest payment is approximately $5,075 per month. To keep housing costs at 28% of gross income, a household needs to earn roughly $217,000 per year. With no other significant debt at a 36% back-end DTI threshold, the minimum drops to around $169,000. Property taxes and insurance add to the required income. Our guide on how much of your income should go toward a mortgage explains the qualification mechanics in detail.
What is the monthly payment on a $1 million home at today’s mortgage rates?
At 6.54% on a 30-year fixed loan with 20% down ($800,000 loan), the estimated principal and interest payment is approximately $5,075 per month. Add property taxes and insurance and the all-in monthly cost in most California and New York markets typically runs $6,200–$7,400 per month. Use our mortgage calculator for an estimate based on your actual numbers.
Why are starter homes so expensive in California and New York?
Both states have faced decades of constrained housing supply, driven by restrictive zoning, slow permitting, and geographic limitations, combined with strong demand from high-income employment markets. The pandemic accelerated the trend by layering historically low mortgage rates onto existing supply shortages. Unlike Sun Belt markets that responded with new construction and saw price growth moderate, California and New York have not meaningfully resolved their supply deficits.
What are the most affordable states to buy a home in 2026?
Based on recent affordability research, the most accessible states for buyers in 2026 are Indiana, Iowa, South Carolina, Texas, and North Carolina. Twelve of the top 13 most affordable states are in the Midwest or South. In Indiana, the median home price is roughly $295,810, requiring about 28% of median household income. These markets have also seen steady job and population growth, making them viable for buyers with geographic flexibility. Tips for first-time buyers navigating any market are a useful complement.
Can I still buy a home in an expensive city if I can’t afford $1 million?
Potentially, yes. Not every neighborhood within a high-cost metro commands the same price. Adding a co-borrower, buying down the rate, or targeting a condo rather than a single-family home can shift the math. The most important first step is getting pre-approved. Our guide to how to afford a million-dollar home covers the qualification levers in detail.
Does a $1 million home require a jumbo loan?
It depends on the down payment and the county. The 2026 FHFA conforming loan limit is $832,750 in most U.S. counties. A $1 million home with 20% down produces an $800,000 loan, just under the standard conforming limit. But in many high-cost counties on this list, county-specific conforming limits apply and purchase prices often push buyers into jumbo territory regardless. Understanding jumbo vs. conventional loan requirements before you apply is important.
The bottom line
A record 242 U.S. cities now have million-dollar starter homes. That’s real, and if you live in California, New York, New Jersey, or select other metros, it’s your market. But the typical starter home in the United States is still under $200,000, and several states offer genuine affordability for buyers willing and able to relocate.
For buyers in expensive markets, the options range from practical (co-borrowers, rate buydowns, adjacent zip codes) to strategic (understanding whether the rent-vs-buy math works in your city). None of these decisions are made well without knowing your real buying power. Getting pre-approved gives you accurate data to plan around.
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Rates and payment figures cited in this article represent national averages and illustrative examples provided for informational purposes only. Rates change daily and vary based on credit score, down payment, loan type, loan amount, property location, and lender. Home value data and city counts are sourced from third-party housing research and are subject to change. All figures shown are estimates only and do not constitute an offer to lend. Better Mortgage is a licensed mortgage lender. Not all borrowers will qualify. Loan approval is subject to credit approval and program guidelines.