in Affordability, Daily Dose, Featured, Market Studies, Market Trends, Migration, News, Real Estate June 27, 2023 209 Views
Although home prices have remained steep after rapid growth during the height of the pandemic, paying $1 million or more for a house may seem excessive, if not impossible, to most Americans.
But just because most people aren’t spending seven figures on a house doesn’t mean million-dollar homes aren’t prevalent in some parts of the U.S.
While million-dollar houses aren’t common in most of the nation’s largest metros, they make up a majority share of homes in two California metros, San Jose and San Francisco— notoriously high-cost areas.
To see where million-dollar houses are most common, LendingTree analyzed data from the U.S. Census Bureau’s American Community Survey to find the share of million-dollar homes in each of the nation’s 50 largest metropolitan areas.
While persistently high home values have priced many would-be homebuyers out of the market, high asking prices aren’t the only reason why buying a home can be difficult now.
Other factors like elevated mortgage rates and scarce housing inventory work together to make today’s housing market especially challenging to navigate.
Although they’ve come down from their recent peak in late 2022, 30-year fixed mortgage rates are sitting near a 20-year high. Because higher rates result in larger mortgage payments, buying a house can be far more expensive than it would’ve been this time last year or during the height of the pandemic—even in places where home prices have fallen slightly.
On top of this, a lack of homes for sale exacerbates many of today’s housing-related challenges. Low inventory pushes home prices higher and gives would-be buyers fewer options. Even for those who can afford to buy, it may remain unfeasible because they can’t find a home that’ll fit their needs.
For those who can’t afford a million-dollar property, just because you aren’t planning on spending $1 million or more on a home doesn’t mean you won’t find yourself in a high-cost area where there’s no choice but to spend a little extra to buy a home.
At the end of the day, high home prices doubtlessly cause problems for many homebuyers nationwide. However, until mortgage rates decrease and housing inventory rises, buying-related challenges will likely remain prevalent in the housing market.
To read the full report, including more data, charts, and methodology, click here.
Tagged with: 30-year fixed mortgage Affordability High home values high-cost areas Home Prices Home Sellers Homebuyers House hunters housing costs Housing studies Housing Trends Interest rates LendingTree Mansions Market Studies market trends migration trends Million-Dollar Homes Mortgage Rates Properties
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According to the latest Loan Performance Insights Report, 16 metro areas posted slight annual delinquency upticks. With hurricane season in full swing, some areas of the U.S. could see typical seasonal delinquencies rise later this year and into 2024.