Residential Real Estate News
Orange County, Chicago, Phoenix, and Washington DC Become Trillion Dollar U.S. Housing Markets
Redfin reports that the total value of housing has now surpassed $1 trillion in eight U.S. markets. Orange County, Chicago, Phoenix, and Washington D.C. have recently joined Los Angeles, New York, Atlanta, and Boston in this exclusive group. This expansion highlights the significant surge in home prices over the past year.
Orange County California's housing market alone saw a $121 billion increase in value, reaching $1.11 trillion as of June 30, making it the fifth-most valuable market according to Redfin. The added $121 billion in value nearly matches the total worth of all homes in either Rochester, NY, or New Orleans.
To put this into perspective, Orange County's 12% increase in value over the past year ranks as the third-largest percentage gain among the 95 major U.S. markets analyzed.
Redfin's report, which assessed the value estimates of over 95 million U.S. residential properties as of June 2024, also revealed that the total value of homes nationwide rose by $3.1 trillion, reaching a record $49.6 trillion in the past year.
Chen Zhao, a Redfin economist, predicts that the U.S. housing market will likely surpass the $50 trillion mark within the next 12 months, citing the limited number of homes on the market as a key factor driving prices higher. This shortage of supply has been a consistent theme in the U.S. housing market, leading to one of the most unaffordable housing markets in a generation.
Home prices saw a sharp rise during the pandemic, as families and remote workers took advantage of historically low borrowing costs to upgrade their living spaces. However, the Federal Reserve's aggressive interest rate hikes aimed at curbing inflation have caused mortgage rates to soar, significantly increasing monthly payments for new homeowners.
Redfin's report also found that home values in certain cities are rising faster than others. In New Jersey, two cities within commuting distance of New York City--New Brunswick and Newark--experienced the fastest year-over-year growth in home values, with increases of 13.3% and 13.2%, respectively.
On the other hand, Cape Coral, Florida, was the only metro area where home values declined, with a 1.6% drop over the past year. New Orleans and Austin also saw growth rates of less than 2%.
While existing homeowners have enjoyed the wealth boost from rising home values, prospective buyers face a challenging market. According to a May Gallup survey, only 21% of Americans believe it is a good time to buy a home.
However, mortgage rates have recently decreased, possibly in anticipation of a potential interest rate cut by the Federal Reserve in September. Although the Fed doesn't directly set mortgage rates, its actions influence borrowing costs across the economy.
Trillion Dollar U.S. Housing Markets in 2024
- New York: $2.5 trillion - up 8% in a year or a $190 billion jump.
- Los Angeles: $2.2 trillion - up 6% or $128 billion.
- Atlanta: $1.3 trillion - up 5% or $62 billion.
- Boston: $1.3 trillion - up 7% or $85 billion.
- Orange County California: $1.11 trillion - up 12% or $121 billion in a year.
- Chicago: $1.08 trillion - up 9% or $85 billion in a year.
- Washington, DC: $1.05 trillion - up 7% or $67 billion in a year.
- Phoenix: $1 trillion - up 6% or $53 billion in a year.
