US Housing Market Recovers Recent Losses—Total Value Now at Record High

Redfin reported on Friday (8-11-23) that the total worth of US homes hit a new record high of $46.8 trillion in June. This overtakes the prior all-time high of $46.6 trillion set a year earlier. The company says this is a result of a shortage of homes for sale propping up housing values.

According to Redfin, the value of US homes rose 0.4%, or $166.2 billion, from a year earlier in June and 19.1%, or $7.5 trillion, from two years earlier. The housing market has now offset the $2.9 trillion decline in value—set off by rising mortgage rates—that occurred from June 2022 through February 2023.

Redfin estimates that 9 out of 10 homeowners with mortgages have a mortgage rate under 6%, which is nearly a full percentage point below today’s average 30-year mortgage rate of 6.96%. As a result, just 1% of the nation’s homes have changed hands in 2023—the lowest share in at least a decade. The number of houses for sale dropped 15% year-over-year to an all-time low in June, the biggest annual decline in nearly two years.

Adding additional background and her analysis, Redfin Economics Research Lead Chen Zhao said:

“The dominance of the 30-year fixed rate mortgage in America is propping up home values. Tons of homeowners scored an incredible deal during the pandemic: a 3% mortgage rate for the remainder of their 30-year loan. Now they’re staying put because moving would mean taking on a rate that’s twice as high. This means buyers who are in the market now are duking it out for a very small pool of homes, preventing home values from plunging.”