A record number of U.S. cities have an average home value above $1 million — a sign that the housing market is becoming increasingly out of reach for some Americans as prices continue to soar.
The United States has 550 cities where the typical home value is north of seven figures, according to a recent Zillow report. This is the largest number of so-called “millionaire” cities ever recorded, according to the real estate listings site, compared to 491 a year ago.
California had the highest concentration of million-dollar towns, with 210 where the average home value exceeded $1 million. New York had 66 and New Jersey — which saw the largest increase — had 49, according to the report.
Rising home prices have been largely fueled by high mortgage rates, with the 30-year fixed rate sitting at 6.79% last week, according to Freddie Mac.
High borrowing costs have deterred homeowners from putting their properties up for sale, creating an imbalance between supply and demand that caused house prices to rise at a record pace in January, according to the Home Price Index. Case-Shiller housing.
“The housing market is tight with few homes available, and competition is still high for housing. This competitive pressure is driving up housing values in the United States,” Anushna Prakash, an economic analyst at Zillow, said in a Tuesday report. note.
But there are signs that housing affordability may be improving, even as economists warn that high mortgage rates are here to stay. Indeed, homeowners are choosing to list their properties for sale anyway, with existing home sales jumping 9.5% in February, according to data from the National Association of Realtors.
A wave of new housing is also in the works. Completed housing units reached 1.7 million in February, 15.6% higher than last year’s increase, according to census surveys.
The median home price in the United States rose to $349,216 in February, already up 4% from levels at the start of the year, according to Zillow. That exceeds the 0.9% growth in home values that Zillow expects for the year, according to the company’s latest forecast.
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