The proportion of American homes worth $1 million or more has climbed to just over 8%, near the all-time high of 8.6% set in June 2022, and an increase from the 12-month low of 7.3% in February of this year, according to a report from Redfin.

Intere🍃st Rates Creating Competition, Higher Prices

A shortage of homes for sale boosted housing values in June to a record $46.8 trillion, surpassing the previous all-time high of ꦏ$46.6 trillion. While this is a good sign of recovery, elevated mortg𒉰age rates are keeping potential sellers from listing their homes to avoid losing the unusually low pandemic interest rates they currently have. For this reason, inventory is low, creating competition and higher prices for those in the market to buy.

“Tons of homeowners scored an incredible deal during the pandemic: a 3% mortgage rate for the remainder of their 30-year loan. Now they’re staying put because moving would mean taking on a rate that’s twice as high. This means buyers who are in the market now are duking it out for a very small pool of homes, preventing home values from plunging,” said Redfin Economics Research Lead Chen Zhao.

Nearly nine in 10 homeowners have mortgages with 澳洲幸运5官方开奖结果体彩网:interest rates under 6%, nearly a full p♕ercentage point lower than today's average ꦿof 6.96%. Because of this, the number of homes that changed hands in the U.S. has dropped below 1% for the first time in at least a decade.

“The supply shortage is making many listings feel hot,” said Zhao. “In most of the country, expensive properties that are in good condition and priced fairly are attracting buyers and in some cases bidding wars, mostly because for-sale signs are few and far between right now.”

New En🍎gland Is Hot, While Coastal Areas Cool Slightly

New England is the fastest-growing region for million-dollar homes. In Bridgeport, CT, which is comprised of many popular New York City suburban communities, more than 25% of homes are worth $1 million or more, up from 23.1% a year ago, the biggest increase of all metro areas. It is followed by Boston, where the share of seven-figure homes went from 20.3% to 21.5%, and Newark, NJ, where it went from 8.7% to 9.7%.

Million-dollar homes are being lost the fastest in expensive coastal metros. Seattle's share dropped from 39.3% to 33% over the past year, the largest decline among the metros examined. Following it are Oakland, CA (55.1% to 49%) and Oxnard, CA (40.2% to 34%). The metros of Los Angeles, San Diego, San Jose, San Francisco, Anaheim, New York, and Washington D.C. also experienced a decline.

Affordable Markets Seeing a Jump

Suburbs and rural areas are holding value, while high-end homes in pricey West Coast markets are seeing outsized drops in home values due in part t𝔍o the shift to remote work. While more affordable areas saw the biggest jump in home val꧙ues, they didn’t experience the same increase as Phoenix and San Francisco during the pandemic, meaning prices still have room to rise. 

Little Rock, AR, reported an 8.8% increase in home values in June, surpassing all other metros. Camden, NJ at 8.7%, Milwaukee at 8.5%, Wilmington, DE at 8.5%, Bridgeport, CT at 8.3%, Greenville, SC at 7.8%, Hartford, CT at 7.6%, Charleston, SC at 7.2%, Greensboro, NC at 7.2%, and Columbia, SC at 7.1%, followed. Still, the typical home in these areas still sells for below the national median of $426,056, creating a stronger demand from buyers who feel they are still in the race.

Home values between $500,000 and $750,000 increased 4.1% year-over-year in June, and those between $250,000 and $500,000 increased 4%. In contrast, homes worth between $1 million and $2 million saw a 2.6% drop in value, while those worth between $2 million and $5 million dropped 7.4%.