“Million-Dollar Cities” took even more share in the U.S. as inventory keeps home prices moving up.
There are 550 cities where the typical home value is $1 million or more, up from 491 last year, according to a new Zillow report.
Home prices were depressed some last year as Americans adjusted to rising rates but have rebounded since the beginning of the year, with many metros clocking new record highs.
Most of these affluent areas are in California, which boasts 210 cities, more than the next five states combined.
New York and New Jersey took second and third place, but the NYC metro area – which includes parts of Jersey and Pennsylvania – would take first for most additions. There are 24 more million-dollar cities than last year.
“Affordability is still a big challenge for buyers, but that hasn’t stopped prices from growing,” said Anushna Prakash, an economic research data scientist at Zillow.
“Buyers this spring are going to see more options to choose from, but they’ll also see a lot of other buyers wandering through the same open houses. Competition will stay fierce, especially for the most attractive and well-priced homes.”
In these cities, YOY price growth is slightly more than the national average: 4.6% compared to 4.2%.
Prakash noted that more price surges may be on the way if mortgage rates fall later this year, which most analysts expect. Lower rates would lead to a jump in demand but inventory remains tight, leading to more buyers competing for the same homes and pushing prices up.
Florida, Texas, and Delaware were the only states to see a net loss of million-dollar cities.
Rising prices pose a challenge for buyers trying to navigate the sky-high costs of purchasing a home, but are a boon for homeowners building wealth. CoreLogic reported that home equity increased by 8.6% YOY in Q4 2023. They’ve seen their equity balloon by a total of $1.3 trillion since the end of 2022.
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