The dream of homeownership is becoming increasingly out of reach for many Americans, with new research showing that a million dollars is now barely enough to afford a “starter home” in more than 200 U.S. cities. According to a study by Zillow, the cost of a typical starter home has reached $1 million or more in a record 237 cities, up from just 84 cities in 2019. This surge in housing prices reflects the affordability crisis that millions of Americans are currently facing.
The report highlights that the imbalance between supply and demand is a major driver of rising home prices. As the number of people looking to buy homes outpaces the number of homes available, prices are pushed higher. States like California, New York, and New Jersey have the highest number of cities where a starter home costs $1 million or more. The report also notes that markets with restrictive building regulations tend to have more cities with high-priced starter homes.
While rising home values have outpaced the increase in typical U.S. home prices over the past five years, recent data suggests that the housing market may be shifting. Home sales have dropped, and inventory is beginning to rise, offering hope for prospective buyers. Experts believe that conditions are starting to favor buyers, with more homes available for sale and price cuts becoming more common.
Overall, the housing market is showing signs of change, with a shift from a seller’s market to a buyer’s market on the horizon. As more homes become available and prices stabilize, first-time home buyers may find better opportunities in the near future. Despite the challenges faced by today’s buyers, there is optimism that the market may become more accessible in the coming months.
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