There Are Now More Than 500 U.S. Cities Where the Average Home Price Is $1M

U.S. homebuyers can’t seem to catch a break. While there are glimmers of hope for new affordable housing, interest rates remain high, competition is fierce, and existing stock is only getting more expensive.

The U.S. now has more than 500 "million dollar" cities, according to a new a report from Zillow—places where, on average, homes cost $1 million or more. The number of cities that fall in that category is at 550, up 59 from one year ago. The listing site says it calculates that dollar estimate, what it calls a "typical" home value, by taking "a weighted average of the middle third of homes in a given region." Broken down primarily by state and major metro area, the study shows just how dramatically home prices have risen, particularly in coastal states.

Unsurprisingly, California tops the list with 210 million-dollar cities in 2024, up from 198 last year. San Francisco, Los Angeles, and San Jose are in the top five California metro areas home to such cities. New Jersey, which recently passed a bill to add affordable housing statewide, saw the greatest growth in total million-dollar cities, gaining 14. Arizona and Illinois effectively doubled their counts from two to four and three to six, respectively, with the Chicago metro area accounting for the gains in its region. The study does not specifically name individual cities within listed states or metro areas.

Zooming out, according to the listing site, a typical home across Los Angeles County comes in at $872K; King County, which includes Seattle’s metro area (and its 17 million-dollar cities), has a typical home value of $831K. In the Boston metro area, WBUR reported in 2023 that the average home price hit $900K.

But what does $1 million get you in 2024 in one of these places? Searching Zillow for listings in Seattle, that figure shows several three-bed, two-bath homes, or four and threes, with anywhere from 1,800 to 2,800 square feet. In the Phoenix metro area, where the population surged past five million in spring of last year, you get a little more—homes are closer to 3,000 square feet with four beds and three baths. In Boston, a Zillow search for homes within a similar price range reveals two-bed, two-bath condos at around 1,200 square feet, and further away from the city center, four-bed, three-bath single-family homes with around 2,000 square feet.

Since the 1960s, U.S. home prices have risen nearly two and a half times faster than inflation, according to a study by Clever, an agent-matching service. Had prices kept pace with inflation, "the median home would cost only $177,500 today—compared to the $431,000 it actually costs," reads the report. That figure helps explain why Gen Z and millennials feel shut out of the housing market.

Since 2000, those states currently ranking highest among million-dollar cities have seen some of the largest and most dramatic increases in home prices: California, which is ranked first on the Zillow report, saw a 259 percent increase; Hawaii, ranking eighth at 17 million-dollar cities, has seen home prices go up by more than 300 percent. However, the study shows that even those states that have fewer of these cities—places like Louisiana, Ohio, and Michigan—saw home prices increase between 85 and 101 percent.

While the rising prices continue to exacerbate affordable housing issues, the increases could be good news for home sellers in these and other cities with the million-dollar status. Lowered agent fees after the recent National Association of Realtors court decisions could further incentivize them to list. But, as the Zillow report notes, with speculation around potential interest rate drops coming later this year, homebuyers might see a further increase in demand, yielding even higher home prices.

Related Reading:

Who Is Optimistic About Buying a Home? Not Younger Americans

In New Jersey, the Fight for Affordable Housing Is Becoming Everybody’s Obligation

Top photo by 4kodiak, courtesy of Getty Images