The U.S. housing market experienced record value growth in 2023 despite slowing sales, Redfin’s latest real estate report shows. The total value of the 90 million homes in the United States increased from $45.1 trillion in December 2022 to $47.5 trillion in December 2023, an annual growth rate of 5.3%.
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U.S. real estate market values experience record growth in 2023 despite slowing sales Redfin’s latest housing report. The total value of the 90 million homes in the United States increased from $45.1 trillion in December 2022 to $47.5 trillion in December 2023, an annual growth rate of 5.3%.
The average price of a U.S. home in December increased 4.30% year-on-year to $495,183. This is lower than the average home price of more than $500,000 in the second and third quarters of 2022 and 2023, meaning homes purchased during those two quarters have depreciated in value.
Chen Wei | Image source: Redfin
“Homeowners in the United States are doing well right now,” said Li Chen, head of economic research at Redfin, in a written statement. “Despite sluggish buyer demand, they still hold a lot of housing wealth as home values soar during the pandemic. , and now supply shortages are preventing those values from falling.”
Regionally, the Northeast and Midwest saw the largest increases in total home value.
Newark’s total home value increased 12.8% year-over-year to $359.6 billion, the largest increase in any city in the United States. New Haven, Connecticut (+11.9%), Camden, New Jersey (+10.8%), Charleston, South Carolina (+10.8%) and Elgin, Illinois (+10.4%) were among the gainers among the five largest markets. Total home value.
Redfin said gains in these markets come from affordability, especially compared to other cities in their regions. Newark and Camden benefited from buyer interest from New York City, and Milwaukee and Grand Rapids benefited from buyers in the Midwest looking for affordable places to settle.
“When mortgage rates and home prices rise, demand for affordable housing increases,” the report said.
Meanwhile, historically expensive markets and pandemic boom towns have also underperformed, either losing value or recording minimal gains in 2023.
Boise saw the largest decline in total home value (-3.8%), followed by New York (-1%), New Orleans (-0.8%) and Stockton, Calif. (-0.7%). Philadelphia (+0.3%), Honolulu (+0.8%), Austin (+1%), Denver (+1.3%) and Riverside, California (+1.6%) eked out gains of 2%.
“Most of the metro areas mentioned above have one thing in common: they have become unaffordable for many homebuyers, so home values no longer have much room, if any, to rise because of demand,” the report states. There’s a cap.” “In Boise and Austin, median sales prices are also higher than nationally, and many are struggling with high home prices as an influx of out-of-towners has caused home prices to soar during the pandemic.”
Zhao said that while the record-breaking growth in U.S. housing market values is good news for homeowners, it is a huge challenge for homebuyers dealing with economic headwinds.
“Potential buyers are not so lucky,” she said. “Rising mortgage rates, high home prices and a limited number of homes for sale mean home ownership remains as unaffordable as ever. One bright spot for buyers is that mortgage rates should start to fall by the end of 2024.”
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