U.S. housing market boom: Number of trillion-dollar metros doubles amid rising home values

A year ago, there were four trillion-dollar metros in the United States. That number has since doubled, adding Anaheim, Washington, D.C., Chicago and Phoenix to the list.

Redfin reported that in the last 12 months, the value of U.S. homes has increased by $3.1 trillion, bringing the overall value to a whopping $49.6 trillion.

Five metros with the highest gains:

1. New Brunswick, New Jersey, up 13.3% to $582.6 billion
2. Newark, New Jersey, up 13.2% to $406.2 billion
3. Anaheim, California, up 12.1% to $1.1 trillion
4. Charleston, South Carolina, up 11.8% to $188.9 billion
5. New Haven, Connecticut, up 11.8% to $91 billion

“The value of America’s housing market will likely cross the $50 trillion threshold in the next 12 months as there are not enough homes being listed to push prices down,” Redfin Economics Research lead Chen Zhao said in the report. “Mortgage rates have started falling, but many potential sellers and buyers are waiting to make a move, meaning we are likely to continue seeing a pattern where prices slowly tick up. That’s great news for the millions of American homeowners who see their equity rising, but first-time buyers are going to keep finding it tough to find an affordable home.”

The issue of supply and demand has caused many potential homeowners — especially younger generations — to postpone buying a house. Even the surge of homes built — 1.4 million — during the pandemic wasn’t enough to fill the deficit.

“The simple fact is there are not enough homes in this country, and that’s pushing homeownership out of reach for too many families,” Orphe Divounguy, the senior economist at Zillow, said, per a Zillow report . “The affordability crisis extends to renters as well, with nearly half of renter households being cost burdened. Filling the housing shortage is the long-term answer to making housing more affordable. We are in a big hole, and it is going to take more than the status quo to dig ourselves out of it.”

Whether renting or buying, the market is rough, but according to a Bankrate survey , renting is considered more affordable in America’s 50 largest metro areas, with the average cost of buying a home being almost 37% higher than renting on a monthly basis.

Mortgage rates have steadily fallen in the past couple of months, with the current 30-year fixed-rate mortgage at 6.47% as of Aug. 8, according to Freddie Mac . Although lower, it’s still a steep rate for many Americans to be willing to purchase a home.

“Purchasing a home is a long-term commitment. Home price appreciation has slowed considerably, and costs have risen dramatically since the days of 3 percent mortgage rates, so it’s going to take more time to break even on a purchase compared to renting,” Skylar Olsen, a chief economist at Zillow, said, per Bankrate.