Austin Home Values Equivalent To Ecuador’s Total GDP
December 2021 saw a record annual surge in US home value, the largest gain seen in any December since at least 2001, according to a new analysis of Redfin’s Housing Value Index.
U.S. home value rose 18.6% year-over-year (YOY) to $38.6 trillion. Austin, TX, saw home values double that, jumping 39.2% YOY. That shakes out to $365.9 billion, roughly the 2020 GDP of Ecuador and the biggest gain of any metro tracked by Redfin.
December marked the 17th consecutive month of double-digit price gains as inventory shrank to a record low.
Cape Coral, FL, saw the second-highest gains (36.9%), followed by Grand Rapids, MI (33.1%), Phoenix (32.8%), and Boise, ID (32.8%). Cape Coral and Phoenix have consistently made the list of hottest destinations for homebuyers looking to move during the pandemic.
Austin has previously made that list but has been knocked out due to many buyers being priced out of the market.
St. Louis was the only metro that saw a decline, with total home value dropping 2.1% to $184.8 billion. The East and Midwest saw the smallest gains: Albany, NY (7.3%), Chicago (7.5%), Washington, D.C. (8.8%), Pittsburgh (9%), Frederick, MD (9.1%), Philadelphia (9.4%), Milwaukee (9.7%), Baltimore (10.3%) and Rochester, NY (10.3%).
“The surge in housing values during the pandemic has widened the gap between homeowners and renters in America. Homeowners have seen their wealth increase significantly over the past year, while renters have missed out on those gains and are now grappling with rent inflation,” said Redfin Chief Economist Daryl Fairweather.
“The silver lining is that housing values didn’t just climb in large affluent cities. Homeowners in rural America, who don’t normally see substantial home-value increases, also reaped the benefits of a booming housing market.”
Homebuyers prioritizing affordability and more space have gravitated towards homes outside of cities, resulting in rural home values rising 19.5% YOY. This topped urban home gains of 15%.
Meanwhile, American renters have seen average rents rise 14% in the last year, with cities like Austin, New York, and Miami seeing increases as high as 40%. They’re expected to rise another 10% in 2022.
Home prices are expected to cool in 2022 as the Fed hikes interest rates. CoreLogic predicts home price appreciation will average out to 3.5% by December.
“Much of what we’ve seen in the run-up of home prices over the last year has been the result of a perfect storm of supply and demand pressures,” said CoreLogic Chief Economist Dr. Frank Nothaft.
“As we move further into 2022, economic factors – such as new home building and a rise in mortgage rates – are in motion to help relieve some of this pressure and steadily temper the rapid home price acceleration seen in 2021.”