The total value of homes surged 18.6 percent ($6 trillion) over the past year, to a record $38.6 trillion in December 2021 from $32.6 trillion in December 2020, according to a Redfin report. That’s the largest annual gain in both dollar and percentage terms seen during any December since at least 2001.
December marked the 17th-straight month of double-digit home price gains, while the number of homes for sale sunk to a record low.
“The surge in housing values during the pandemic has widened the gap between homeowners and renters in America. Homeowners have seen their wealth increase significantly over the past year, while renters have missed out on those gains and are now grappling with rent inflation,” Redfin Chief Economist Daryl Fairweather said in a release. “The silver lining is that housing values didn’t just climb in large affluent cities. Homeowners in rural America, who don’t normally see substantial home-value increases, also reaped the benefits of a booming housing market.”
The total value of homes in Austin, Texas, soared 39.2 percent year-over-year to $365.9 billion in December, the largest gain among most populous metro areas that Redfin analyzed. Next came Cape Coral, Fla. (36.9 percent), Grand Rapids, Mich. (33.1 percent), Phoenix (32.8 percent), Boise, Idaho (32.8 percent), North Port-Sarasota, Fla. (31.9 percent), Raleigh, N.C. (29.4 percent), Las Vegas (29.1 percent), Salt Lake City (28.4 percent) and Tampa, Fla. (28.3 percent).
With home prices surging across the Sun Belt, Fairweather predicts homebuyers will increasingly start moving to more affordable northern cities like Indianapolis, Columbus, Ohio, and Harrisburg, Pa.
St. Louis was the only metro that saw a decline, with total home value falling 2.1 percent to $184.8 billion. The city experienced record home-value growth in 2020, which may be a reason for the year-over-year decline in 2021, according to Redfin.
The metros with the smallest increases were Albany, N.Y. (7.3 percent), Chicago (7.5 percent), Washington, D.C. (8.8 percent), Pittsburgh (9 percent), Frederick, Md. (9.1 percent), Philadelphia (9.4 percent), Milwaukee (9.7 percent), Baltimore (10.3 percent) and Rochester, N.Y. (10.3 percent).
The total value of rural homes rose 19.5 percent year-over-year to a total of $4.2 trillion in December. By comparison, the value of suburban homes climbed 19.2 percent to $22.2 trillion and the value of urban homes increased 15 percent to 10.7 trillion.
The total value of single-family homes climbed 19.6 percent year-over-year to $29.2 trillion in December, the value of multi-family properties climbed 15.6 percent to $1.3 trillion, the value of condos rose 15.4 percent to $6.8 trillion, and the value of townhouses increased 15.3 percent to $1.3 trillion.
Millennials have taken up an increasing share of the housing market, accounting for more than half of mortgage applications last year. The total value of homes owned by millennials grew 34.3 percent year-over-year to a total of $4.6 trillion in the third quarter of 2021, the most recent period for which data was available. By comparison, the value of homes owned by Gen X rose 20 percent to $11.9 trillion, the value of homes owned by baby boomers increased 11.9 percent to $15.9 trillion, and the value of homes owned by the silent generation fell 1.7 percent to $4.4 trillion, as many older Americans downsized or moved into retirement homes.
The total value of homes in neighborhoods that are majority Native Hawaiian and other Pacific Islander rose 25.9 percent year-over-year in December. By comparison, Hispanic or Latino neighborhoods saw 19.1 percent growth, Asian neighborhoods experienced an 18.2 percent gain, majority white neighborhoods saw a 17.9 percent increase and majority Black neighborhoods experienced a 17.1 percent gain.
“The pandemic has been somewhat of an equalizer when it comes to housing-market-value gains, at least on a percentage basis,” Fairweather said. “That’s a positive for some groups, including Asian homeowners, who last year reaped a large gain after seeing one of the smallest increases the year before. But it also poses challenges for renters in those groups, who may now be priced out of homeownership.”