Record 8.5 percent of homes worth $1 million or more: Analysis

A record 8.5 percent of U.S. homes are worth $1 million or more, according to a new report from the real estate company Redfin.

The share of homes worth at least $1 million is up from 7.6 percent a year ago and has more than doubled from 4 percent before the pandemic. 

Redfin attributes the record rise to record home prices.

Mortgage rates “sitting at more than double pandemic-era lows since the start of 2022,” the company notes, and a housing supply shortage is also pushing up prices. 

Housing inventory is down 30 percent from pre-pandemic levels as many homeowners hold onto low mortgage rates they contracted after the Federal Reserve slashed rates to near-zero levels during the pandemic. New construction in Texas increased supply and helped contain price growth in Austin and across Texas.

“Home prices, insurance and mortgage rates have shot up so much that many people are either priced out of the market or weary of committing to such a high monthly payment,” said Julie Zubiate, a Redfin Premier agent in the Bay Area, which has the highest home prices in the country with a media sale price of $1.5 million.

All but three of the 50 most populous metro areas saw the share of these expensive homes rise from a year ago. The share of multimillion-dollar homes in California, which already boasted the biggest share, is growing faster than anywhere else, Redfin found.

It fell in Austin, Texas, where 10 percent of homes are worth at least $1 million, and it remained at 2 percent in Indianapolis and 3.6 percent in Houston. New construction in Texas increased supply and helped contain price growth in Austin and Houston.

The housing affordability crunch could loom large in the upcoming election, in which Vice President Harris has heavily focused on housing affordability.

Harris has proposed a plan to build 3 million new housing units, tax incentives for the construction of affordable homes and up to $25,000 in down payment assistance to first-time homebuyers, among other measures meant to spur housing construction and make homes more affordable for Americans.

Trump has yet to release a detailed housing plan. When asked by a voter how he would bring down home and rent prices earlier this month, Trump said he would take steps to reduce the cost of energy.