Record-high home prices, driven by historically low inventory, have pushed the share of homes worth more than $1 million in the U.S. market to 8.5%, the highest share in history. Last year, 7.6% of homes were valued at more than $1 million and before the pandemic, only 4% of homes were worth more than $1 million, according to a Redfin report.

Despite high mortgage rates dampening demand, home prices have been rising for the past year, a particularly evident trend for homes that were already expensive.  The median sale price of U.S. luxury homes rose 9% year-over-year to a record $1.18 million in the second quarter, said Redfin. This has an outsized impact on the share of homes worth at least $1 million because a major portion of them have long been on the cusp of hitting the million-dollar mark and now have crossed that threshold, the company said.

Soft demand resulting from mortgage rates more than double pandemic-era lows, would typically push home prices down, noted the firm. However, inventory remains about 30% below pre-pandemic levels because many homeowners are locked in by low rates.