Real Estate Market Reaches $47 Trillion Record High

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Real Estate Market Reaches $47 Trillion Record High

Aug 22, 2023 | News | 0 comments

In June 2023, US home value peaked at $46.8T, surpassing the $46.6T record from a year ago. Over a year, the market gained 0.4% ($166.2B) and 19.1% ($7.5T) in two years. It offset a $2.9T decline due to rising mortgage rates (Jun ’22 – Feb ’23).

Chen Zhao from Redfin noted that the dominance of 30-year fixed-rate mortgages sustains home values. Pandemic-era 3% rates anchor homeowners, limiting housing supply and preventing value drops for current buyers.

Around 90% of homeowners currently hold mortgages with rates below 6%, contrasting with today’s average of 6.96%. Consequently, only 1% of homes changed ownership this year, the lowest in a decade. U.S. homes for sale dropped 15% YoY in June, an all-time low. Of 32 major metros with falling June home values, 11 were in Texas. Notably, Austin’s home value fell 9.6%, followed by Oakland, Seattle, San Francisco, and Los Angeles. Overpriced West Coast markets suffered due to remote worker migrations, tech layoffs, and higher rates. Similarly, Sun Belt metros like Austin, Phoenix, and Las Vegas saw value declines after a pandemic-driven surge.

Austin’s Redfin Premier agent Carmen Gioia noted the rarity of multiple house offers. Buyers take time due to abundant inventory. Gioia warns sellers of potential weeks-long sales, even with good pricing.

Los Angeles saw the biggest home value decline, down $152.6 billion YoY in June, followed by Oakland, Seattle, Phoenix, and San Francisco. Conversely, affordable markets like Little Rock, Camden, and Milwaukee saw notable gains. Atlanta had the largest increase, up $40.1 billion YoY, trailed by Boston, Miami, New Brunswick, and Montgomery County.

Redfin reported Millennials’ home values rose 2.9% YoY to $5 trillion in Q1 2023, overtaking other generations. Millennials outpaced the Silent Generation for a second consecutive quarter. Silent Generation homes dropped 11.4% to $4.7 trillion, Generation X fell 0.7% to $13.4 trillion, and Baby Boomer homes remained at $18 trillion.