The housing market just reached an incredible milestone

(CNN) — The total value of the housing market now exceeds $1 trillion in eight US cities, doubling from just four cities last year and underscoring just how much home prices have skyrocketed in a relatively short time, according to a report released Thursday from Redfin.

Chicago, Phoenix, Washington and Anaheim, California, have joined New York, Los Angeles, Atlanta and Boston as cities where total home values top $1 trillion, according to the report. San Diego and Seattle are close behind, with total home values of approximately $987 billion and $971 billion, respectively.

The report, which analyzed Redfin’s value estimates for more than 95 million US residential properties in June 2024, also found that the total value of homes across the US jumped by $3.1 trillion to a record $49.6 trillion in the last year.

“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 economist Chen Zhao said in a statement.

When supply doesn’t keep up with demand, prices are driven higher. That’s been the story of the US housing market for years as Americans grapple with one of the most unaffordable housing markets in a generation.

Home prices surged during the pandemic as more families and remote workers took advantage of dirt-cheap borrowing costs to upgrade their spaces. Then, the Federal Reserve’s aggressive interest rake hike campaign to battle inflation sent mortgage rates surging, significantly adding to the monthly costs that new mortgage holders must pay.

Home prices fell in only one metro area

Home values in some cities are growing more quickly than others, Redfin’s report found. Two New Jersey cities within commuting distance to New York City – New Brunswick and Newark – saw the fastest year-over-year total home value growth in the last year, according to Redfin. New Brunswick home values jumped 13.3% and Newark’s grew 13.2%. Anaheim; New Haven, Connecticut; and Charleson, South Carolina, were among the other US cities that saw double-digit percentage growth in home values since last year.

Only one metro area saw its home values fall, Redfin said: Cape Coral, Florida saw the value of its housing market drop of 1.6% over the last year. New Orleans and Austin also experienced less than 2% growth.

The surge in home prices has resulted in existing homeowners feeling wealthier than ever. But for those who are interested in buying a home, the rapid rise in home prices has been disheartening. According to a May Gallup survey, just 21% of Americans felt it was a good time to buy a home.

However, mortgage rates have taken a dip in recent weeks ahead of a potential interest rate cut by the Fed in September. While the Fed doesn’t directly set mortgage rates, its actions influence borrowing costs throughout the economy.

But Redfin economist Zhao estimates that may boost home prices further.

“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,” she said in a statement. “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.”

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