No trillionaires exist, not yet. But trillion-dollar metropolitan areas? They exist, and they’re multiplying.
In the last year, the number of trillion-dollar metros doubled, from four to eight. New York, Los Angeles, Atlanta, and Boston were already in the trillion-dollar club, meaning their total value of homes totaled more than a trillion dollars. They were joined by Anaheim, Chicago, Phoenix, and Washington, D.C., according to an analysis from Redfin published Thursday that looked at more than 95 million residential properties and their home values in most parts of the country as of June (the data is subject to revision, it said).
Two more metros could make the cut soon: San Diego and Seattle. You won’t see San Francisco on the list since its total value of homes comes to about $700 billion. Still, when it’s coupled with Oakland and San Jose, their total is worth close to $2.5 trillion. Similarly, home values in Dallas and Fort Worth, combined, equal more than a trillion dollars.
For what it’s worth, there are several variables at play, such as number of homes, total area in square miles, typical home prices, etc. Consider this: Phoenix and Los Angeles are both trillion-dollar cities, even though Phoenix’s average home value is considerably lower than L.A.’s. Los Angeles also has a greater population, but the area of Phoenix is slightly larger.
In the past year, the total sum of homes in the country increased by slightly more than $3 trillion, pushing the housing market’s worth to an all-time high: close to $50 trillion. In the past decade, the total value of homes has more than doubled, according to Redfin. It’s no secret why: Home prices exploded during the pandemic, and they’re still on the rise, albeit more slowly. And it all comes down to supply. There aren’t enough homes because of underbuilding and the lock-in effect, although the latter will relent. The phenomenon is occurring only because mortgage rates were so low during the pandemic that once they rose suddenly, the pain of sticker shock ensued. Relatively speaking, mortgage rates in the last year or so aren’t wildly high or even unheard of. The shortfall of homes in the millions, on the other hand, is lasting.
“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,” said Chen Zhao, economics research lead at Redfin.
But mortgage rates are falling, home price inflation is slowing, and inventory is increasing as the market rebalances—and some places are building more homes, too, enough to meet demand. Two of the 10 metros that saw the greatest leaps in value were in California (Anaheim and San Jose); six of the 10 metros that saw the smallest increase in value were in Texas (Austin, Fort Worth, El Paso, McAllen, Houston, and San Antonio). The Lone Star State builds many more homes than the Golden State, because it’s easier to do so, and it's why Sunbelt boomtowns are cooling off.
Some other metropolitan areas that saw home values swell were in New Jersey, close to New York City—or, as Redfin put it, “relatively-affordable New Jersey metros within commuting distance of New York, where property is more expensive.” It could be an indication that remote, or hybrid, work is alive and well, or that super-commuting is still a thing.
Separately, another thread from Redfin’s analysis showed there are around 57 million homes in the suburbs, 22 million in urban areas, and 21 million in rural areas. Even so, rural home values rose faster than the other two categories in the last year, but “the value of homes in the suburbs cracked the $30 trillion mark for the first time.” Home values in urban areas are worth more than $10 trillion, and those in rural areas are worth under $8 trillion.
And lastly, some sort of good news for millennials: The total value of homes owned by the generation rose 21.5% from a year earlier to almost $9 trillion in the first quarter. That’s four times as fast as any other generation. “The increase is partly due to the overall growth in home prices, but also because millennials are now the largest generation by population and have reached an age and financial position where they make up a larger share of the homebuying market,” the analysis read. But as you might expect, baby boomers are still the richest generation and their homes are worth much more.
