US housing market recoups US$3 trillion lost in recent slowdown

THE US housing market has regained the nearly US$3 trillion in value that was wiped out during the past year’s slowdown, according to an estimate from brokerage Redfin.

A shortage of listings has pushed up prices, boosting the total value of US homes to a record US$47 trillion, the brokerage reported.

Many homeowners locked in cheaper mortgage rates before borrowing costs started surging last year, leaving them reluctant to give up those loans. Just 1 per cent of US homes changed ownership this year, the lowest share in at least a decade, according to Redfin.

The owners are “staying put because moving would mean taking on a rate that’s twice as high,” Chen Zhao, Redfin Economics research lead, said in the report. “This means buyers who are in the market now are duking it out for a very small pool of homes, preventing home values from plunging.”

Atlanta’s homes had the biggest jump in value, rising US$40.1 billion from last June. Boston posted a US$33.4 billion gain, while values in Miami were up US$30.3 billion.

On a percentage basis, the largest gains were in relatively affordable markets. Little Rock, Arkansas, homes saw an 8.8 per cent gain from a year earlier, where values in Camden, New Jersey, rose 8.7 per cent. The more-reasonable set of costs in those cities likely bolstered buyer demand, according to Redfin.

SEE ALSO

US mortgage delinquency rates fall to all-time low

US construction spending rises strongly in June

A 5% US mortgage rate is seen as tipping point to unlock supply

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

Values fell from a year earlier in 32 metropolitan areas, and California cities were among the hardest hit. Los Angeles had the largest decline – nearly US$153 billion – followed by Oakland, with almost US$86 billion. San Francisco home values decreased about US$58 billion. BLOOMBERG