Insufficient supply offsets the impact of high interest rates, with US house prices rising 7% year-on-year
The shortage of supply in the US real estate market has led to a 7% year-on-year increase in house prices. Despite the Federal Reserve's consecutive rate hikes to lower prices, the total value of the real estate market has increased by $3.1 trillion in the past year, a year-on-year growth of 6.6%. Due to insufficient housing listings to push prices down, it is expected that the total value of the real estate market will surpass the $50 trillion mark in the next 12 months. This makes it difficult for first-time homebuyers to find affordable housing, but it is good news for homeowners. Mortgage rates have started to decline, but many potential sellers and buyers are still waiting on the sidelines
Despite the Federal Reserve's consecutive interest rate hikes over the past year aimed at slowing down the economy and lowering house prices by raising interest rates, this strategy has not been effective. On the contrary, the housing market has now become the most unaffordable period in American history.
According to the latest report from real estate brokerage company Redfin, the total value of U.S. housing has increased by $3.1 trillion in the past year to reach $49.6 trillion.
In percentage terms, the total value of the U.S. real estate market has grown by 6.6% year-on-year, with some media outlets stating:
"This obviously makes the Federal Reserve Chairman, who has always hoped to lower house prices through interest rate hikes, feel very embarrassed."
Moreover, the total value of U.S. residential properties has nearly doubled over the past decade, growing by almost 120% from $22.7 trillion in June 2014.
Redfin's Chief Economist Chen Zhao stated:
"Due to insufficient housing inventory to push prices down, the total value of the U.S. real estate market may surpass the $50 trillion mark in the next 12 months."
"Mortgage rates have started to decline, but many potential sellers and buyers are waiting on the sidelines , which means we may continue to see a pattern of slow price increases. This is good news for millions of American homeowners as they see their assets rise, but first-time buyers will continue to find it difficult to afford housing."
Some analysts pointed out:
"This is a conservative statement. If they couldn't afford to buy a house during the most aggressive rate hike cycle since Volcker, the upcoming rate cuts will certainly not make things easier."
The Number of Trillion-Dollar Metropolitan Areas Surges, Rural Housing Value Growth Outpaces Urban and Suburban Areas
According to statistics, the number of metropolitan areas with housing values exceeding $1 trillion has increased to 8, doubling from four a year ago. Anaheim, Chicago, Phoenix, and Washington D.C. have joined the "Trillion Dollar Club" of New York, Los Angeles, Atlanta, and Boston. In the past year, the total property value of 13 major metropolitan areas has achieved double-digit percentage growth.
If house prices continue to grow at a similar pace, analysts predict that San Diego and Seattle will also join this list in the next 12 months.
It is worth noting that the growth rate of housing values in rural areas has exceeded that of urban and suburban areas, with an annual growth of 7%, reaching $7.8 trillion. The total housing value in urban areas has grown by 6% to $10.3 trillion, while the housing value in suburbs has surpassed the $30 trillion mark for the first time, growing by 6.8% to $30.1 trillion
