According to Redfin Estimates, the total value of U.S. homes was $45.3T at the end of 2022, down -4.9% ($2.3T) from a record high of $47.7T in June 2022. This represents the largest June-to-December drop in percentage terms since 2008. The +6.5% y/y increase in December 2022 represents the smallest year-over-year increase during any month since August 2020.
Summary of Redfin Data 2/22/23
- Homebuyer demand slowed in large part because of rising mortgage rates. While the 6.36% average 30-year fixed mortgage rate in December 2022 was down from the 20-year high of 7.08% in November, it’s roughly 2x the level from the start of 2022. While rates fell at the beginning of February, they have since crept back up to December levels.
- In any case, the total value of U.S. homes remains $13T higher than it was pre-covid (February 2020).
- Home values are holding up better in the suburbs than in cities, which have seen an exodus of residents due to remote work.
- Millennials, who are now in their prime homebuying years, have experienced larger value gains than other generations.
Source: U.S. Homeowners Have Lost $2.3 Trillion in Value Since June Peak (redfin.com)
