Buying a home in this economy is becoming a lot harder for first-time buyers, according to new real estate analysis.
The Wall Street Journal reports that about one in 10 homes across the country has a value of $1m. The increase is due to record high home prices in the US. In June, the median home sale rose to $442,525, according to brokerage Redfin.
The price of luxury homes, considered to be the top 5 per cent of listings, hit a new high of $1.18m during the second quarter, the outlet reported.
Some of the most expensive real estate is in California’s San Francisco Bay Area. San Francisco has the highest number of $1m homes in the country.
As of June, 80 percent of houses there were listed at more than $1m. That number is only slightly higher than the 76 percent reported at the same time last year.
One Bay Area real estate agent told the outlet that she assumes buyers with a $1m budget are only looking at condos, because even that wouldn’t be enough to afford a single-family home.
Statewide, California has the most expensive real estate in the country.
Even areas that hadn’t historically had high home prices are seeing increasing demand, like Anaheim, where 58 percent of homes are now worth $1m. That’s up from 51 percent in 2023.
Despite a decline in sales due to high-interest mortgages, a lack of inventory is what’s keeping the price of homes high.
In one metro area, however, prices did go down. Austin saw a decline of $1m homes from 10.1 percent to 10 percent this year. According to the outlet, the slight decline was attributed to additional developments across Texas bringing in competition.
Only Kansas City, Pittsburgh, Cleveland and Detroit metro areas had about 1 per cent of homes worth $1m.
Of course, first time buyers wanting to get the biggest bang for their buck could still do so outside of the country’s largest metro areas.
Some of the cheapest places to buy a home in the US included Jackson, Mississippi; Syracuse, New York; Toledo, Ohio and Wichita, Kansas, among other cities, according to Zillow.
