Report: U.S. Residential Real Estate Achieves Record-Breaking $52 Trillion
The U.S. residential housing market has made a remarkable recovery, reaching a historic high valuation of $52 trillion, according to recent data from Zillow. The market experienced a temporary dip from July 2022 to January 2023, largely attributed to higher mortgage rates causing slower sales. However, it has since rebounded, adding $2.6 trillion in value over the past year.
Zillow economist Orphe Divounguy attributes this growth to the influx of new homes entering the market during the spring and summer months. He suggests that this trend may continue, with new home sales playing a more significant role in the overall housing market.
California maintains its position as the state with the most valuable housing market, exceeding $10 trillion, constituting over 20% of the nation’s total value. While the total value of California’s housing market is slightly below its peak in May 2022, Florida has surged to the second position, surpassing New York. Texas and New Jersey secure the fourth and fifth spots, respectively, while Massachusetts, once ranked fifth pre-pandemic, has dropped to sixth place. Washington, which held the fifth position a year ago, now stands at seventh.
Miami has also climbed to the top five most valuable metropolitan areas, displacing Washington D.C. Other cities such as New York, Los Angeles, San Francisco, and Boston have consistently maintained their top rankings over the past four years.
Despite the 30-year fixed-rate mortgage reaching its highest level since 2000 at 7.3% in the week ending September 28, the housing market continues to favor sellers. The shortage of housing inventory, attributed to driving new construction, results in homes quickly selling after listing. Homeowners who secured lower mortgage rates are choosing to stay in their homes, exacerbating the inventory problem. According to the National Association of Realtors, total housing inventory in August stood at 1.1 million units, down 0.9% from July and 14% from the previous year (1.28 million units).