Supply Shortage Keeps Prices High

While high mortgage rates have led to slower homebuying demand, a shortage in housing supply has kept prices elevated. Many homeowners are holding onto their properties due to locked-in low mortgage rates, further reducing inventory. Although there has been a slight improvement in inventory levels, it remains about 30% below pre-pandemic levels, leading to competition among buyers and keeping prices high. For homeowners, the increasing value of their properties is a financial boon, potentially boosting their real estate portfolios or providing substantial returns upon selling. However, for prospective buyers, especially first-time buyers, the rising number of million-dollar homes poses a significant affordability challenge.

Regional Trends: California Leads the Way

California continues to dominate the market with the highest concentration of million-dollar homes. In Anaheim, 58.8% of homes are now valued at $1 million or more, up from 51% last year. San Diego and Los Angeles have also seen substantial increases, with 42.6% and 39.3% of homes, respectively, now worth over a million dollars.

The Bay Area remains the most expensive region, with roughly 80% of homes in San Francisco and San Jose valued at $1 million or more, the highest in the country. In contrast, more affordable metro areas like Detroit, Cleveland, and Pittsburgh have less than 1% of homes valued at seven figures.

Conclusion

The growing number of million-dollar homes reflects the ongoing challenges in the U.S. housing market, where low inventory continues to drive up prices despite higher mortgage rates. While this trend benefits current homeowners, it creates hurdles for buyers, especially in high-demand areas like California.



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