Just over 8 percent of U.S. homes are worth $1 million or more, near June 2022’s all-time high of 8.6 percent, according to a new report from Redfin.
The share of homes worth seven figures is on the upswing after dipping to a 12-month low of 7.3 percent in February. That’s because home prices are rising on a year-over-year basis after falling at the beginning of the year, according to Redfin. The median home-sale price rose 3 percent in July, the biggest increase since last November. Prices are rising faster for high-end homes, with the median sale price of luxury homes up 4.6 percent year-over-year to $1.2 million in the second quarter.
Redfin added that today’s elevated mortgage rates are discouraging potential homesellers, with homeowners staying put to keep their relatively low mortgage rates. Inventory is so low that even though many buyers are sidelined by high rates, those who are in the market are competing for the few homes for sale. That’s driving home prices up and pushing many of those on the cusp above the million-dollar mark.
“The supply shortage is making many listings feel hot,” Redfin Economics Research Lead Chen Zhao said in a release. “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.
“Still, there’s no rush to offload high-value homes. Recent economic signals that the U.S. may avoid a broad recession could cause high-end buyers to feel more confident in making a major purchase in the coming months. There may be more demand coming down the pipeline.”
The share of homes worth seven figures has doubled since before the pandemic; just over 4 percent of homes were valued at $1 million or more in June 2019. The share has shot up because home prices skyrocketed in 2020 and 2021 as record-low mortgage rates and remote work drove Americans to buy homes, Redfin data shows.
Parts of New England are gaining million-dollar homes fastest. Just over one-quarter (25.8 percent) of homes in the Bridgeport, Conn., metro—which is made up of many popular New York City suburbs—are worth at least $1 million, up from 23.1 percent a year ago, the biggest increase of the metros in this analysis. It’s followed by Boston, where the share increased from 20.3 percent to 21.5 percent, and Newark, N.J. (8.7 percent to 9.7 percent).
All in all, Redfin shows the portion of homes worth $1 million or more as up year-over-year in 55 of the 99 most populous metros. But the uptick is small, less than one percentage point, in almost all of those.
The portion of million-dollar-plus homes is unchanged in three metros and down in the remaining 41.
Expensive coastal metros are losing million-dollar homes fastest. The share dropped from 39.3 percent to 33 percent over the last year in Seattle, the biggest decline of the metros in this analysis. It’s followed by Oakland, Calif. (55.1 percent to 49 percent) and Oxnard, Calif. (40.2 percent to 34.5 percent). Los Angeles, San Diego, San Jose, Calif., San Francisco, Anaheim, Calif., New York and Washington, D.C. are also among the metros where the share fell.
California has the highest share of million-dollar-plus homes in the country, by far. First is San Francisco, where 81.2 percent of homes are worth at least $1 million, down from 84.2 percent a year earlier. It’s followed closely by San Jose (79.6 percent, down from 82.9 percent). Next come Anaheim, Oakland, San Diego and Los Angeles, all places where the share of seven-figure homes has fallen a bit over the last year, but where roughly 40 percent to 50 percent of all are still worth at least $1 million, according to Redfin.
There are essentially no million-dollar homes in several inexpensive metros, including parts of Texas and upstate New York.
The share of homes worth $1 million or more is 0.5 percent or lower in Omaha, Neb.; Dayton, Ohio; McAllen, Texas; El Paso, Texas; Akron, Ohio; Detroit; Buffalo, N.Y.; Elgin, Ill. and Rochester, N.Y.