The collective value of homes in the U.S. housing market rose by 5.3% over the past year, growing to $47.5 trillion, according to a new Redfin report.
The real estate brokerage came up with the figure based on analysis of its proprietary Redfin Estimate for more than 90 million homes as of December. The company’s website touts the accuracy of the Redfin Estimate, which uses MLS data on recently sold properties to calculate a home’s current market value.
That 5.3% jump marks the largest uptick in 11 months, and the total value of U.S. homes was up 13.3% from two years prior. The average U.S. home was valued at $495,183 as of December, up 4.3% from $474,740 in the same month in 2022. (Home values have recently crossed the $500,000 threshold in the summers of 2023 and 2022; homeowners who bought during those periods will have likely lost value on their properties.)
“America’s homeowners are sitting pretty,” said Chen Zhao, economics research lead at Redfin. “They’re holding a massive amount of housing wealth, despite lackluster demand from buyers, because home values skyrocketed during the pandemic and now a supply shortage is preventing those values from falling.”
Home values are particularly burgeoning in urban areas close to but more affordable than large, pricey metropolitan hubs. Because of its proximity to New York, for example, the total value of Newark, New Jersey, homes grew by 12.8% annually to $359.6 billion in December. That’s the largest gain of any metro, followed by two other Eastern Seaboard metros close to the Big Apple: New Haven, Connecticut (11.9%) and Camden, New Jersey (10.8%).
Those pricey hubs, on the other hand, are seeing marginal increases or price drops, as are so-called “pandemic boomtowns” which saw outsized inbound migration — and as a result, substantially increased home prices. Boise, Idaho, an oft-cited pandemic destination, saw the largest downshift in home value at 3.8%, followed by New York (-1.0%) and New Orleans (-0.8%). Philadelphia (0.3%), Honolulu (0.8%) and Austin (1.0%).
Notably, rural and suburban area home values are still outpacing those of urban areas. Rural homes saw their value rise 6.3% year over year in December, while suburban home values climbed 5.6% over the same timeframe. The total value of urban area homes, in comparison, rose just 3.6%.
