US Housing Market Gained $2 Trillion In Value In 2023

The U.S. housing market gained $2.4 trillion over the last year, bringing its total value to $47.5 trillion, according to new data from Redfin (NASDAQ:RDFN).

The average U.S. was valued at $495,183 as of December, up from $474,740 a year earlier. In percentage terms, the total value of homes increased 5.3% from a year earlier in December, the biggest increase in 11 months, and was up 13.3% ($5.6 trillion) from two years earlier. Redfin attributed this increase to the ongoing low inventory of available residential properties, a rebound from a drop in home values at the end of 2022, and a growing number of newly constructed homes.

Redfin also noted the total value of homes in urban areas rose 3.6% year over year to $10.1 trillion in December while the value of homes in the suburbs rose 5.6% to $29.2 trillion and the value of homes in rural areas increased 6.3% to $7.4 trillion.

“America’s homeowners are sitting pretty – they’re holding a massive amount of housing wealth, despite lackluster demand from buyers, because home values skyrocketed during the pandemic and now a supply shortage is preventing those values from falling,” said Redfin Economics Research Lead Chen Zhao. “Prospective buyers aren’t as lucky. The combination of elevated mortgage rates, high home prices and a limited pool of homes for sale means homeownership is about as unaffordable as ever. One bright spot for buyers is that mortgage rates should start declining before the end of 2024.”