The $1 Million Starter Home Era Is Here

In 28 U.S. states, entry-level homes now demand luxury-level budgets

Starter homes were once considered the gateway to homeownership—a modest, affordable first step into the housing market. But in 2025, that first step looks more like a financial leap. According to new data from Realtor.com, 28 states now have at least one city where the median price for a starter home tops $1 million. This shift signals a growing challenge for middle-income and first-time buyers, as affordability continues to slip further out of reach.

A Shift in the Definition of ‘Starter Home’

Traditionally, a starter home was defined as a property priced at or below 80% of the median home value in a given area. Today, that benchmark is being shattered. Rising property values, limited inventory, and high demand have driven up prices in many desirable areas, leaving buyers with few affordable entry points.

Atlanta, Georgia       

According to the April 2025 Housing Market Trends Report by Realtor.com, Atlanta, Georgia, is not among the 28 U.S. states where the median price for a starter home has reached $1 million or more. In fact, Atlanta remains relatively affordable compared to many other major metropolitan areas.

The median list price for homes in the Atlanta-Sandy Springs-Roswell metro area was $412,470 in April 2025, reflecting a slight decrease of 0.8% year-over-year. The price per square foot also saw a modest decline of 1.3% during the same period. To afford a median-priced home in this area, a household would need an annual income of approximately $109,034, which is a 57.7% increase compared to April 2019 .

California Leads the Pack

• Cities with $1M+ starter homes: 77

• Top cities: Rancho Santa Fe ($5.4M), Malibu ($4.8M), Beverly Hills ($4.8M)

• Even relatively modest areas like Granada Hills have starter home prices close to $1M.
  In California, starter homes are increasingly being purchased by wealthier or older buyers, sidelining younger, first-time home seekers.

Florida’s Luxury Entry Points

• Cities with $1M+ starter homes: 25

• Top cities: Pinecrest ($3.1M), Anna Maria ($2.4M), Palm Beach ($2.39M)
  With 7.5% of Florida cities exceeding the $1M mark for starter homes, the Sunshine State is quickly becoming out of reach for budget-conscious buyers.

New York’s Price Tag Shock

• Cities with $1M+ starter homes: 10

• Most expensive: Water Mill, Southampton ($5.48M)
  Known for its celebrity presence, Water Mill is not a realistic option for most first-time buyers—even its “starter” homes top $1.5 million.

Other States Joining the $1M Club

• Massachusetts: 9 cities, 40.9% of which cross the $1M threshold

• Colorado: Telluride ($3.26M) leads 10 high-cost cities

• New Jersey & Washington: Each with 6 pricey starter-home cities

• Connecticut: Greenwich tops at $3.3M

• Hawaii: Kamuela median starter home at $2.1M

• South Carolina: Kiawah Island tops at $2.46M

The Changing Landscape for First-Time Buyers

According to Realtor.com, the median age for first-time buyers has climbed to 38, largely due to these affordability challenges. Starter homes—once stepping stones for young professionals—are now being snapped up by older, higher-earning individuals or families with financial assistance.

Buyers seeking affordability are encouraged to:

• Look beyond major metros and luxury zip codes

• Consider townhomes or condos

• Be open to renting longer until the market shifts

• Explore states like Ohio, Pennsylvania, Vermont, and Maine, where $1M+ starter homes are still rare

Thinking of buying your first home but worried about the rising costs? Let’s find hidden gems and smart strategies to help you break into homeownership—without the $1 million price tag.