Uncovering The Surging Costs Of Starter Homes In The U.S.

One of the biggest purchases that someone can make in their lifetime is buying a home. Unfortunately, the cost of owning a home seems to be increasing with inflation, but many 'starter' homes can be found within a 'reasonable' price range. One Minnesota community has made a Top-US list for the price of its 'starter homes', which average more than a million dollars.

Zillow research crunched the numbers recently and found that more than 200 cities in the US have an average 'starter home' price of more than a million dollars, just 5 years ago the number of cities in the US with this high average was less than 100.

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In more than 200 U.S. cities, buyers will find a price tag of $1 million or more on the typical starter home. A housing shortage that worsened over the pandemic has helped drive the cost of all homes to new heights. The typical “starter home” — defined for this analysis as being among those in the lowest third of home values in a given region — is worth at least $1 million in 237 cities, the most ever. Five years ago, there were only 84 such cities. - Zillow Research

So what does 'starter home' mean? Well typically that means homes for sale in the community that fall into the lower third of price, and on average homes at this level are worth $196,611, so seeing a community here in MN with an average price of a MILLION dollars is crazy!

Image Credit: Google Maps

So what Minnesota city has sky-high real estate prices? A town that I've never heard of, but have been assured online is real...Minnetonka Beach. According to Zillow Research, "Minnetonka Beach is quite a small city, however, with less than 250 homes and a population of only 535 residents, according to the city's website."

Homes in Minnetonka Beach average $1.008 million.

Back in 2019, no Minnesota city would have made the list.

You can see the full list from Zillow by heading here.