Nationwide, a typical first home costs roughly $200,000. But in a growing number of cities across the U.S., that same amount will only cover the down payment. 

Today, amid a nationwide housing deficit and rising mortgage costs, you need at least $1 million for a starter home in 237 cities, according to a Zillow analysis. That’s a hefty sum for a place to live that’s defined in the report as being in the lowest third of home values in a given region. The new data marks a significant rise from five years ago, when only 84 U.S. cities had starter homes that cost seven figures.

How did we get here?

The pandemic exacerbated an existing housing shortage in cities across the U.S., which is most pronounced in Boston; Sacramento, California and Portland, according to Zillow. Despite robust residential home construction in 2023, the 1.4 million homes that were built do not sufficiently close the gap between available units and the number of home seekers in the U.S.

“It’s no surprise we are kind of in a housing affordability crisis across the U.S.,” Zillow senior economist Orphe Divounguy told CBS MoneyWatch. “You saw a couple of decades of underbuilding, clashing with a surge in residential mobility during the pandemic that pushed prices and rents higher.”

Divounguy suggested that relief for homebuyers could be on the horizon, with more homes starting to come up for sale, and price cuts rising. 

“There is some light at the end of the tunnel. We have more newly built homes coming on the market, and builders are trying to make the math work for homebuyers. As inventory increases, you’re likely to see price growth continue to ease and more sellers offering price cuts,” Divounguy said.

What these cities have in common

While not reflective of the typical starter home price across the U.S., half of all U.S. states have at least one city where a relatively modest residence costs $1 million. California is home to 117 such cities, the most of any state, while New York has 31 and New Jersey has 21. Florida and Massachusetts each have 11, according to Zillow’s analysis. 

The New York City metro area has 48 cities with million-dollar starter homes — the most of any metropolitan area. The San Francisco metro area has 44, Los Angeles has 35, San Jose 15 and Miami and Seattle each have eight. 

One commonality among cities with $1 million starter homes: They tend to have very restrictive building regulations, which could hamper new construction, according to the report. 

In coastal markets like California and New York, there’s a limited supply of buildable land for new homes, as well as natural constraints, such as mountains, lakes and oceans, Divounguy noted.