Share of U.S. Homes Valued Over a Million Dollars Declining Now
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Loading... - Brandon Stevens
- 10 Mar 2023
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San Francisco, Seattle And New York Losing Most Million+ Valued Homes
National property broker Redfin is now reporting that just over 7% of U.S. homes are worth $1 million or more. That figure is as of January 2023, the most recent data available. The share has dropped from June 2022's all-time high of 8.6% and remains essentially unchanged from a year earlier-but it's up from 4.2% just before the pandemic began.
Million-dollar-plus homes making up a smaller portion of the housing pie than they did in the spring is an illustration of the cooling market. Home values and prices have dropped from record highs as 6.5%-plus mortgage rates dampen homebuying demand. That has pushed a certain portion of homes that would have been worth seven figures at the peak of the pandemic homebuying frenzy below the million-dollar threshold. Some of the decline from the June peak is due to seasonality, as home prices typically decline in the second half of the year, but the June-to-January drop noted in this report is much bigger than usual.
"Home values are coming down from their peak and fewer sellers could fetch seven figures-but that doesn't mean buyers are getting a break," said Redfin Economics Research Lead Chen Zhao. "The typical homebuyer's monthly mortgage payment is even higher than it was when home values peaked in the spring because rates are so much higher and although home prices have come down, they certainly haven't crashed. Now isn't the time for buyers who need to take out a loan to get a good deal: Buying an $800,000 home today would cost more per month than buying a million-dollar home a year ago."
With today's 6.6% mortgage rates, a buyer who made a 20% down payment would pay $5,241 for an $800,000 home. With the 3.5% rates common in early 2022, that same buyer would pay $5,034 per month for a $1 million home.
The portion of U.S. homes worth seven figures has nearly doubled since before the pandemic, and the typical home is worth significantly more. That's due mostly to home prices soaring as demand skyrocketed during the pandemic and partly to the general uptick in home values over time. Read More…
