Four more U.S. cities now have housing markets worth more than $1 trillion compared to a year ago.
The number of metros where total home values surpass $1 trillion has doubled to eight, according to new figures. facts from Redfin.
Anaheim (California), Chicago, Phoenix and Washington DC have now reached milestones as home prices across the US have skyrocketed.
These cities join New York, Los Angeles, Atlanta and Boston in the billion-dollar club.
According to Redfin, the total value of the U.S. housing market grew by 6.6 percent over the past 12 months, with homes increasing in value by a whopping $3.1 trillion to a record $49.6 trillion.
Chicago is one of the cities that has joined New York, Los Angeles, Atlanta and Boston in the billion-dollar club
Located just outside Los Angeles, Anaheim, California is known as the home of the Disneyland resort and two professional sports teams: the Los Angeles Angels and the Anaheim Ducks.
Home prices in the city rose by a whopping $121 billion last year, thanks in part to new developments and investors.
In the larger cities of Chicago, Washington DC and Phoenix, home prices rose by $84 billion, $67 billion and $52 billion respectively last year, surpassing the $1 trillion mark.
According to Redfin, it’s notable that San Francisco’s total home value is about $700 billion, while the Bay Area’s housing market, along with neighbors Oakland and San Jose, is worth nearly $2.5 trillion.
The Dallas and Fort Worth metro areas combined also surpass the $1 trillion mark, worth $734 million and $294 million, respectively.
US home prices are rising as supply continues to exceed demand.
The number of homes for sale is still low compared to pre-pandemic levels. Many homeowners are staying in their current homes because their mortgages are much lower than the current rate.
While high mortgage rates are also keeping many buyers on the sidelines, there are still enough buyers to compete for a relatively small pool of homes, Redfin said. And that demand is driving up home prices.
“The value of the U.S. housing market is likely to exceed $50 trillion in the next 12 months as there are not enough homes for sale to drive down prices,” said Chen Zhao, head of research at Redfin Economics.
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Anaheim, California, home to Disneyland, has seen its housing market value surpass the $1 trillion mark this year
Washington, DC, now has a housing market worth more than $1 trillion (Pictured: Townhomes in the Capitol Hill neighborhood)
“The value of the US housing market is likely to exceed $50 trillion in the next 12 months,” said Chen Zhao, head of research at Redfin Economics
According to Redfin, new home construction has also contributed to the overall increase in market values.
The total value of U.S. homes has more than doubled over the past decade, up nearly 120 percent from $22.7 trillion in June 2014.
This is because mortgage rates have fallen slightly in anticipation of the Federal Reserve’s expected rate cut in September.
Rates fell to their lowest level since April 2023 early this week, falling to a daily average of 6.34 percent on Aug. 5, a separate report said. report from Redfin.
Benchmark borrowing costs do not directly affect mortgage rates, but mortgage costs will fall if banks expect interest rates to be lowered in the future.
But Zhao predicts this could give house prices a boost at least in the short term.
“Mortgage rates have fallen, but many potential sellers and buyers are still holding off on buying. This means we will likely continue to see a pattern of prices slowly rising,” the spokesperson said.
“That’s great news for the millions of American homeowners who are seeing their equity increase, but for first-time homebuyers, finding an affordable home remains a challenge.”