A Starter Home Will Cost $1 Million In 28 States As Housing Crisis Tightens

Most people think of a starter home as a ranch or bungalow, priced around $200,000 to $300,000, that could turn into a rental property once the owners move into a larger property to accommodate a growing family or bank account.

Pre-IPO Offer: Get A Piece Of A Nearly $5T Global Opportunity By Joining BOXABL As An Early Shareholder At Just $0.80/Share

Massive Demand & Disruptive Potential – Boxabl has received interest for over 190,000 homes, positioning itself as a major disruptor in the housing market.
Revolutionary Manufacturing Approach – Inspired by Henry Ford’s assembly line, Boxabl’s foldable tiny homes are designed for high-efficiency production, making homeownership more accessible.
Affordable Investment Opportunity – With homes priced at $60,000, Boxabl is raising $1 billion to scale production, offering investors a chance to own a stake in its growth.

Share Price: $0.80

Min. Investment: $1,000

Valuation: $3.5B

Starter Homes Are Becoming Forever Homes

Now, though, as the housing crisis deepens, starter homes are turning into forever homes as their prices swell to a million dollars and up. According to Realtor.com, 28 states contain at least one city where the median price for a starter home — houses priced at or below 80% of the area’s median — is around $1 million.

Don't Miss:

Hasbro, MGM, and Skechers trust this AI marketing firm — Invest before it's too late.
Invest Where It Hurts — And Help Millions Heal: Invest in Cytonics and help disrupt a $390B Big Pharma stronghold.

“True starter homes are scarce for first-time buyers today,” Jenna Stauffer, an agent for Sotheby’s Realty, told Good Housekeeping. “The move-up market just doesn’t exist like it used to. Between high prices, interest rates, taxes, and insurance (a lethal combo), it makes upgrading tough.”

California Has The Most Cities With $ 1 Million Starter Homes

According to Realtor.com data, some states are virtual no-go areas if you’re looking for an affordable house to get on the property ladder. California has the most cities with expensive starter homes. Equally, Massachusetts, with its pricey Boston suburbs, has a huge 40.9% of cities where the price of a starter home tops the million-dollar mark.

Zillow’s Z data tells a similar story, revealing that 233 U.S. cities have “starter homes” that cost over $1 million. The New York metro area, including parts of New Jersey and Pennsylvania, has 48 metro areas with million-dollar starter homes—more than any other city. This is a marked difference from five years ago, when there were only 85 cities with starter homes priced at the million-dollar mark.

Trending: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100.

“The concept of the starter home has evolved significantly in recent years because of affordability challenges,” Orphe Divounguy, Zillow’s senior economist, told Good Housekeeping. “When mortgage rates were near 3%, most home buyers could break even and start building equity in their home within a few years.”

People Are Staying In Their Homes Longer

One of the reasons for the sharp increase in the price of starter homes, according to a recent Redfin RDFN report, is that people are staying in their homes longer as interest rates and living expenses bite. The median homeowner now stay in their home for 11.8 years, according to the study.

Not surprisingly, people stay longer in their homes in more expensive cities, further increasing the demand and price of real estate. Redfin data shows that people stayed in their homes longest in Los Angeles, with a median residency of 19.4 years, the longest on record for the area. San Jose, California, was not far behind, with a median tenure of about 18 years.

Property Taxes Are A Big Issue

Property taxes are also a big issue, according to Redfin, forcing residents to remain in their homes. In California, Proposition 13 limits the amount of property tax that can be added to 2% per year, regardless of changes in the home’s value However, if you move home and buy a new one, you will be taxed at the new purchase price, significantly increasing your tax bill, Redfin reports.

“Long-term homeowners tend to have low monthly payments. If they were to move–even using their equity as a down payment–they would have a much higher monthly payment because home prices and interest rates have soared over the last several years,” said Gregory Eubanks, a Redfin Premier agent in Los Angeles.

Renovate Not Vacate

“Many older homeowners are adding on and creating a multigenerational home, with their kids and grandkids moving onto the property," Eubanks says. "And even many people who do move hang onto their house and rent it out because low property taxes and low monthly payments make them view it as a financial asset.”