The count of million-dollar residences in the United States is experiencing an upward trend, as shown by a recent report from Redfin. Published on 11th August, the report reveals that slightly over 8% of houses in the country are worth 1 million dollars or more.
In contrast, back in February, the proportion of homes with a seven-figure valuation declined, reaching its lowest point in 12 months at 7.3%. However, the current percentage of million-dollar homes in the nation is now approaching the record high of 8.6% observed in June 2022.
The Redfin report combines data from public records, MLS data, and the Redfin Estimate which includes data on over 90 million single-family homes, condos, townhouses and multifamily properties.
Short Supply Increases the Number of $1 Million Homes
The price surge, primarily due to limited housing supply, contributes to the increased prevalence of million-dollar properties. July saw a notable 2.6% rise in the typical U.S. home price, marking the most significant increase since November. Luxury homes are experiencing an even more rapid price escalation, with the median sale price climbing by 4.6% annually to reach $1.2 million during the second quarter.
As mortgage rates remain high, many homeowners are choosing not to sell and instead continue to benefit from their existing lower rates. As a result, there is a shortage of properties entering the market and buyers are having to compete for the inventory that is available, thus pushing up house prices.
The proportion of homes valued at over a million dollars has doubled since the period prior to the pandemic. In June 2019, slightly above 4% of dwellings held a valuation of $1 million or higher. This significant surge in proportion can be attributed to the rapid escalation of home prices during the years 2020 and 2021, when record-low mortgage rates and the prevalence of remote work prompted Americans to engage in home purchases.
East Coast Metros Showing Rapid Growth
The New England region is witnessing the most rapid growth in the prevalence of houses worth at least 1 million dollars. In the Bridgeport, CT metropolitan area—which comprises numerous sought-after suburbs of New York City—more than one-quarter (25.8%) of homes now hold a valuation of at least $1 million. This marks a notable increase from 23.1% observed a year ago, signifying the most substantial rise among the analysed metro areas. Following closely is Boston, where the share of million-dollar homes has risen from 20.3% to 21.5%. Similarly, there has been an increase from 8.7% to 9.7% in Newark, NJ.
Florida’s Million Dollar Homes
Coming in fourth place in terms of growth, Miami in Florida has around 14.3% of homes over the million-dollar mark, showing growth of just under 1% from June 2022 to June 2023.
While California has the highest number of million-dollar homes in the country, many coastal areas have seen house price falls—whereas the Sunshine State continues to see positive growth.