2023 has witnessed a remarkable rebound in the U.S. housing market following a brief downturn in late 2022. According to a recent analysis by Zillow, the total value of the housing market in the United States has surged by over $2.6 trillion in the past year.
The current total value of the U.S. housing market, which is calculated by adding Zillow’s estimated values for every home in the country, stands at just under $52 trillion. This represents a $1.1 trillion increase compared to the previous peak reached in June of last year.
While a small portion of this growth can be attributed to a 0.7% rise in the average value of homes in the U.S. during this period, the driving force behind this surge has been new construction projects.
Zillow senior economist, Orphe Divounguy, explained that an influx of newly built homes entering the market in the spring and summer months played a crucial role in reducing the inventory deficit and boosting the overall value of the housing market. Despite higher mortgage rates deterring some potential homebuyers and keeping existing homeowners on the sidelines, the market remained active due to the continued presence of enough buyers. Builders responded to the unmet demand by initiating more projects. As a result, new home sales have increased while existing home sales have declined. This trend is expected to continue as long as interest rates remain elevated.
The four most valuable metropolitan areas in the U.S. housing market have remained relatively unchanged over the past five years, consisting of New York, Los Angeles, San Francisco, and Boston. However, there is a new addition to the top five: Miami, which has climbed from ninth place as recently as May 2021, surpassing Washington, D.C.
Since the start of the COVID-19 pandemic, housing in six markets has experienced the most significant increase in value, with four of them located in Florida. These markets include Tampa (+88.9%), Miami (+86.6%), Jacksonville (+82.4%), and Orlando (+72.3%). Florida has overtaken New York as the state with the second-most valuable housing market due to its substantial population growth, which has fueled strong figures in new construction. Additionally, the heightened competition for existing homes has further contributed to the rise in home values.
California continues to dominate the housing market with a value exceeding $10 trillion, accounting for nearly 20% of the national total. Following California, the top five states with the most valuable housing markets are Florida, New York, Texas, and New Jersey.
Zillow Group, Inc., which is leading the charge in revolutionizing the real estate industry, aims to make homeownership a reality for more individuals throughout the country.
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