Avoiding the word "million" while house hunting may soon be harder for those hoping to snag a reasonable home price, according to a new report from Redfin.
The real estate company found that today, nearly 1 in 10 U.S. homes, or 8.5%, are worth at least $1 million, which is the highest share the nation has ever seen. Plus, the number is up 7.6% from just last year and more than double the 4% seen before the pandemic.
Redfin attributes the rise to record home prices that have been kept up, in part, due to low inventory driving competition between buyers, despite high mortgage rates slowing demand.
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In June, Redfin data showed median home sale prices hit an all-time high of $442,525 after rising 4% year over year. But the month also saw the highest share of price cuts, 20%, with many purchases being canceled by skittish buyers, the real estate company said.
Luxury homes are also at an all-time high, rising more than twice as fast as non-luxury homes at up 8.8% from a year earlier, Redfin data showed. It reports the typical luxury home in the U.S. sold for a record $1.18 million in the second quarter, which it says has pushed the share of homes that were nearly at $1 million over the threshold.
All this to say, sellers are more likely to have a higher-priced asset, but buyers are more likely to be either priced out of, or scared to commit to, affording more and more homes.
So where is this happening the most and the least?
Redfin says all but three of the 50 most populous metropolitan cities in the U.S. saw its share of homes worth $1 million or more rise year over year: It fell in Austin from 10.1% to 10%, and it stayed the same in Houston at 3.6% and Indianapolis at 2%.
California still reigns supreme for having the most million-dollar homes, with more than 80% of homes in both San Francisco and San Jose worth at least $1 million compared to the next highest share in Anaheim at nearly 60%.
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But the state is also gaining million-dollar homes faster than anywhere else in the country, according to Redfin. Anaheim's share of homes worth at least $1 million rose the most since last June at 7.8%, followed by San Diego at 6.1%, then Los Angeles at 4.3% and San Francisco at 4.2%.
Seattle, Wash. also saw a 4.2% increase in its share of $1 million homes, according to Redfin's analysis.
Redfin says you could choose to look at places like Cleveland, Ohio; Detroit, Michigan; Kansas City, Missouri and Pittsburgh, Pennsylvania for options. Less than 1% of homes in each of those cities are worth $1 million.
