US Home Values Continue to Soar in 2023, Led by New Home Construction

Zillow reported on Tuesday (9-26-23) that according to its new analysis, the US housing market has rebounded remarkably in 2023 after a short-lived downturn late in 2022.

Zillow estimates that the total value of the US housing market—the sum of Zillow’s estimated value for every home—is now slightly less than $52 trillion, which is $1.1 trillion higher than the previous peak reached in June. While a small chunk of this growth can be attributed to a 0.7% rise in the average value of a home during this period, the powerhouse behind this surge has been new construction, Zillow says.

Adding additional background and his analysis to the report, Zillow Senior Economist Orphe Divounguy said:

“A steady flow of new homes hit the market this spring and summer, helping chip away at the deep inventory deficit and boosting the total value of the market. Despite the presence of higher mortgage rates, which deterred some home shoppers and kept many existing homeowners on the sidelines, enough buyers remained to keep the market moving. Builders recognized the unmet demand and responded by starting more projects. New home sales rose this year while existing home sales fell and should make up a bigger piece of the home sales pie for as long as rates remain elevated.”