Housing Market Poised to Cross $50T Mark

The U.S. housing market is expected to cross the $50 trillion threshold during the next 12 months, according to a new report from Redfin.

The total value of U.S. homes gained $3.1 trillion over the past 12 months, an increase of 6.6%, to reach a record $49.6 trillion. That more than doubles the total U.S. housing value of $22.5 trillion 10 years ago. A lack of inventory is preventing downward pressure on prices, while at the same time, new construction is driving increases in market valuation, the firm said.

“Mortgage rates have started falling, but many potential sellers and buyers are waiting to make a move, meaning we are likely to continue seeing a pattern where prices slowly tick up,” said Redfin economics research lead Chen Zhao. “That’s great news for the millions of American homeowners who see their equity rising, but first-time buyers are going to keep finding it tough to find an affordable home.”

There are now eight metro areas with home values topping $1 trillion, including Anaheim, California; Chicago; Phoenix and Washington, D.C. They now join New York, Los Angeles, Atlanta and Boston in the trillion-dollar club, said Redfin. San Diego and Seattle are poised to join them in the next 12 months if home values keep increasing at a similar pace.

Some markets experienced double-digit percentage gains during the past year, led by New Jersey metros that are commutable to New York but more affordable. The value of properties in New Brunswick, New Jersey, rose 13.3% to $582.6 billion, while Newark, New Jersey, home values climbed 13.2% to $406.2 billion. Rounding out the top five were Anaheim, which was up 12.1% to $1.1 trillion, Charleston, South Carolina, which was up 11.8% to $188.9 billion, and New Haven, Connecticut, which was up 11.8% to $91 billion.

Cape Coral, Florida, was the only market that fell in total home value, dropping 1.6% to $204.2 billion. Sun Belt metros — especially in Texas — recorded slower growth than markets in other regions. The rest of the bottom five metros included New Orleans, which grew 0.8% to $128.2 billion; Austin, Texas, which was up 1.9% to $392.8 billion; North Port, Florida, which rose 2.1% to $251.8 billion; and Fort Worth, Texas, which was up 2.3% to $293.7 billion.

Rural home values outpaced urban areas and the suburbs, jumping 7% year-over-year to $7.8 trillion. The total value of homes in urban areas rose 6% to $10.3 trillion, while the value of homes in the suburbs cracked the $30 trillion mark for the first time, increasing 6.8% to $30.1 trillion, said Redfin.