What the qualification math looks like
A household needs an annual income of nearly $117,000 to afford the average US home, according to Redfin. At the median price of roughly $418,000, a buyer putting 15 percent down at current rates would need to spend around 40 percent of income on housing. Most lenders and financial advisers recommend keeping that figure below 30 percent.
For a million-dollar starter home, the income requirement rises well beyond that threshold. The 30-year fixed rate has hovered around 6.6 percent in recent months, with forecasters expecting rates to stay in the mid-sixes through the end of 2026.
At that rate, qualifying for a $1 million home typically requires annual household income of at least $200,000, according to financial education site SoFi. That’s well above what most first-time buyers earn.
Where million-dollar starter homes are concentrated
California accounts for the largest share, with 105 cities where entry-level homes carry a seven-figure price tag. New York follows with 41, and New Jersey with 26.
