Some of the most active homebuyers during the COVID-19 pandemic are now pumping the brakes on purchases.
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Tight inventory has helped pushed the share of US homes worth $1 million or more to near record levels, Redfin data shows.
The number of homes worth seven figures or more is now 8.2%, just off the record 8.6% in June 2022.
In February, the share of homes worth seven-figures or more had dipped to a 12-month low of 7.3%.
An analysis from the real estate group shows that 8.2% of US homes are worth $1 million or more. That’s just below the record 8.6% seen in June 2022.
Researchers pointed to tight inventory as the primary driver reason more homes are breaching the seven-figure mark. In February, that number had dipped to a 12-month low of 7.3%.
Notably, too, the share of homes worth seven-figures has doubled since before the pandemic, when about 4% of homes were valued at $1 million or more.
Redfin found that 8.2% of US homes breached the $1 million mark in June 2023.
In July, the median home price climbed 3%, marking the sharpest jump since November 2022. For higher-end homes in particular, prices climbed 4.6% annually, as the median-sale price in that market hit $1.2 million in the second quarter, according to Redfin.
“The supply shortage is making many listings feel hot,” Redfin economist Chen Zhao said. “In most of the country, expensive properties that are in good condition and priced fairly are attracting buyers and in some cases bidding wars, mostly because for-sale signs are few and far between right now.”
It’s possible, Zhao explained, that recent signals that point to a soft landing for the US economy have made high-end buyers more confident in making a big purchase, which suggests more demand could be on the way.
In any case, near-7% mortgage rates have continued to weigh on Americans.
According to Redfin data, a $1 million home today would have a monthly mortgage payment of $6,604 based on a 6.7% rate, compared to the $5,984 seen with last June’s typical rate of about 5.5%.
To that point, Redfin data also show that the total value of the US housing market hit an all-time record of $46.8 trillion in June. That surpassed the $46.6 trillion value seen in 2022, and the figure is 19.1% higher than two years ago.