{"id":174328,"date":"2023-03-06T09:11:17","date_gmt":"2023-03-06T16:11:17","guid":{"rendered":"https:\/\/inbusinessphx.com\/?p=174328"},"modified":"2023-03-06T09:11:17","modified_gmt":"2023-03-06T16:11:17","slug":"million-dollar-homes-are-less-common-as-high-mortgage-rates-cool-the-market-says-report","status":"publish","type":"post","link":"https:\/\/staging.inbusinessphx.com\/?p=174328","title":{"rendered":"Million-Dollar Homes Are Less Common as High Mortgage Rates Cool the Market, Says Report"},"content":{"rendered":"

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Just over 7% of U.S. homes are worth $1 million or more, according to a new report<\/a> from Redfin (redfin.com<\/a>), the technology-powered real estate brokerage. That figure is as of January 2023, the most recent data available. The share has dropped from June 2022\u2019s all-time high of 8.6% and remains essentially unchanged from a year earlier\u2013but it\u2019s up from 4.2% just before the pandemic began.<\/p>\n

Million-dollar-plus homes making up a smaller portion of the housing pie than they did in the spring is an illustration of the cooling market. Home values and prices have dropped from record highs as 6.5%-plus mortgage rates dampen homebuying demand. That has pushed a certain portion of homes that would have been worth seven figures at the peak of the pandemic homebuying frenzy below the million-dollar threshold. Some of the decline from the June peak is due to seasonality, as home prices typically decline in the second half of the year, but the June-to-January drop noted in this report is much bigger than usual.<\/p>\n

\u201cHome values are coming down from their peak and fewer sellers could fetch seven figures\u2013but that doesn\u2019t mean buyers are getting a break,\u201d said Redfin Economics Research Lead Chen Zhao. \u201cThe typical homebuyer\u2019s monthly mortgage payment is even higher than it was when home values peaked in the spring because rates are so much higher and although home prices have come down, they certainly haven\u2019t crashed. Now isn\u2019t the time for buyers who need to take out a loan to get a good deal: Buying an $800,000 home today would cost more per month than buying a million-dollar home a year ago.\u201d<\/p>\n

With today\u2019s 6.6% mortgage rates, a buyer who made a 20% down payment would pay $5,241 for an $800,000 home. With the 3.5% rates common in early 2022, that same buyer would pay $5,034 per month for a $1 million home.<\/p>\n

The portion of U.S. homes worth seven figures has nearly doubled since before the pandemic, and the typical home is worth significantly more. That\u2019s due mostly to home prices soaring as demand skyrocketed during the pandemic and partly to the general uptick in home values over time.<\/p>\n

Bay Area, Seattle and New York are losing million-dollar homes fastest<\/b><\/p>\n

The share of homes valued at seven figures is falling quickest in the Bay Area and other expensive coastal areas. Just over 80% of San Francisco homes are worth at least $1 million\u2013the biggest share of the 99 most populous U.S. metros, but down from 86.3% a year ago.<\/p>\n

Oakland, CA, where 44.8% of homes are worth $1 million or more, down from 50% a year ago, experienced the next-biggest decline. It\u2019s followed by Seattle (27.5%, down from 30.9%), New York (29.5%, down from 32.5%) and San Jose, CA (79.2%, down from 81.7%).<\/p>\n

The Bay Area has seen outsized drops because home prices there have dropped more than in other places. San Francisco\u2019s median sale price fell 9.4% year over year in January and Oakland\u2019s fell 7.8%, two of the three largest declines in the U.S. Rising mortgage rates have hit expensive markets particularly hard because homes there are so expensive, with even a small bump in rates translating to a big increase in monthly mortgage payments.<\/p>\n

Using a variation of the example above, even a nearly 10% drop in San Francisco\u2019s prices doesn\u2019t cancel out the impact of today\u2019s high mortgage rates. The typical San Francisco homebuyer would pay $8,372 for today\u2019s median-priced ($1,278,000) home with a 6.6% rate. A year ago, a buyer would have paid $1,410,000 for the typical home\u2013but their monthly payment would have been much lower, around $7,100 with a 3.5% rate.<\/p>\n

The prevalence of tech workers is another reason for falling prices in those places: There isn\u2019t as much demand for homes there as there once was because of the popularity of remote work, and stumbling stocks and the surge of layoffs in the industry means fewer people can afford to buy.<\/p>\n

Still, the vast majority of homes in the Bay Area are worth at least a million dollars, and more than a quarter of homes in Seattle and New York hit that mark.<\/p>\n

Florida is home to more million-dollar homes than a year ago<\/b><\/p>\n

Roughly 1 in 7 (14.4%) of Miami homes are worth at least $1 million, up from 11.5% a year ago, the biggest increase of the metros in this analysis. The next-biggest upticks are in North Port, FL (11.3%, up from 9.1%), Anaheim (54.2%, up from 52.2%), Nashville (8.4%, up from 6.4%) and West Palm Beach, FL (12.8%, up from 11.1%).<\/p>\n

Million-dollar homes are making up a larger chunk of Florida\u2019s housing stock because many parts of the Sunshine State are still seeing substantial upticks in home values and prices. Florida was home to six of the 10 metros with the biggest home-value increases last year, and Miami, North Port and West Palm Beach all saw 5%-plus annual price increases in January.<\/p>\n

Florida homes are holding their value because there\u2019s still healthy demand from buyers, especially out-of-town remote workers moving in from more expensive parts of the country. Five of the nation\u2019s 10 most popular migration destinations are in Florida, despite its status as the most hurricane-prone state in the U.S. Redfin agents report that homebuyers typically move in for the state\u2019s relatively affordable homes, beaches, warm weather and lack of a state income tax.<\/p>\n

All in all, the portion of homes worth at least a million dollars is up from a year earlier in 70 of the 99 most populous U.S. metros. It\u2019s unchanged in 11 and down in the remaining 18.<\/p>\n

View the full report, including charts, metro-level data and methodology, here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Just over 7% of U.S. homes are worth $1 million or more, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That figure is as of January 2023, the most recent data available. The share has dropped from June 2022\u2019s all-time high of 8.6% and remains essentially unchanged from a year […]<\/p>\n","protected":false},"author":2,"featured_media":174329,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","footnotes":""},"categories":[6],"tags":[12],"class_list":["post-174328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy-trends","tag-featured-stories"],"_links":{"self":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts\/174328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=174328"}],"version-history":[{"count":0,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/wp\/v2\/posts\/174328\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=174328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=174328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.inbusinessphx.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=174328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}