U.S. Housing Market Springs Back: Zillow Reports $2.6 Trillion Surge

house for saleImage by Jhonatan Perez

The U.S. housing market exhibited a robust recovery in 2023, bouncing back from a brief downturn experienced late in the previous year. According to a new analysis conducted by Zillow®, the total value of the U.S. housing market has soared by over $2.6 trillion within the past year.

The cumulative value of the U.S. housing market, calculated as the sum of Zillow’s estimated value for every home in the country, now stands at just under $52 trillion. This figure surpasses the previous peak attained last June by $1.1 trillion. While a modest 0.7% rise in the average value of a U.S. home contributed to this growth, new construction has emerged as the primary driver behind the surge.

Zillow’s senior economist, Orphe Divounguy, credits the introduction of new homes in the market during spring and summer for helping to alleviate the inventory deficit and thus bolstering the overall market value. “Despite the presence of higher mortgage rates, which deterred some home shoppers and kept many existing homeowners on the sidelines, enough buyers remained to keep the market moving,” Divounguy said. “Builders recognized the unmet demand and responded by starting more projects. New home sales rose this year while existing home sales fell, and should make up a bigger piece of the home sales pie for as long as rates remain elevated.”

The ranking of the four most valuable metro areas in terms of housing market value has remained largely consistent for the past five years, with New York, Los Angeles, San Francisco, and Boston leading the pack. However, Miami has made significant strides, climbing from ninth place in May 2021 to secure the fifth spot, thereby nudging Washington, D.C., out of the top five.

Zillow’s analysis also reveals that four of the six markets where housing has gained the most value since the onset of the pandemic are located in Florida: Tampa (+88.9%), Miami (+86.6%), Jacksonville (+82.4%), and Orlando (+72.3%). Given these figures, it’s not surprising that Florida has now overtaken New York as the state with the second most valuable housing market. The surge in population growth coupled with increased competition for existing homes have significantly boosted home values in Florida.

However, California remains unbeatable, boasting over $10 trillion in its housing market value, accounting for nearly 20% of the national total. Florida, New York, Texas, and New Jersey complete the top five states with the most valuable housing markets.

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