A new analysis from Redfin reveals that a record 8.5 percent of all U.S. homes are now worth $1 million or more, up from 7.6 percent last year and 4 percent before the pandemic. California is leading in adding these high-value homes compared to other states.
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The percentage of $1 million homes in the U.S. has reached a new peak at 8.5 percent, according to Redfin data shared with The Wall Street Journal. This number has been steadily rising, with a 7.6 percent share last year and only 4 percent before the pandemic.
As home prices continue to rise nationally, more properties are hitting the $1 million mark. The median home sale price reached a record high of $442,525, up 4 percent from the previous year. Luxury home prices, representing the top 5 percent of the market, also saw a 9 percent increase year over year to $1.18 million in the second quarter of 2024.
Redfin economist Chen Zhao noted that owning a $1 million home used to signify wealth, but it has now become a common entry point in certain markets. The demand for homes has softened due to high mortgage rates, but prices remain high due to low inventory levels.
While the growing share of $1 million homes benefits current homeowners, it poses affordability challenges for first-time buyers. Mortgage rate drops have provided some relief, increasing buyers’ purchasing power and bringing them back into the market.
Most major metros in the U.S. are experiencing a rise in $1 million homes, except for a few areas like Austin, Texas, where the share declined. California, particularly in cities like Anaheim, San Diego, and LA, continues to see significant increases in $1 million homes.
San Francisco and San Jose have the highest percentage of $1 million homes, with about 80 percent of properties valued at least $1 million. On the other hand, cities like Detroit, Cleveland, Pittsburgh, and Kansas City have fewer $1 million homes.
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