Home Values Jumped 31.4% in 2021, Adding $9.1T in Value


Despite a pandemic, political unrest, and an array of other unprecedented events, in the end 2021 was good to housing.

A new report shows that the value of homes in the U.S. jumped an incredible 31.4 percent this year, allowing homeowners to gain a collective $9.1 trillion in home value.

The report, out Wednesday from Redfin, found that the total value of U.S. homes at the conclusion of November was $38.3 trillion. That represents a 31.4 percent year-over-year gain, and blows away the 9.7 percent gains from 2020. The report attributes the jump to “record-low mortgage rates, remote work and a soaring stock market,” all of which fueled demand.

Daryl Fairweather

This is good news for those who own real estate, though Redfin Chief Economist Daryl Fairweather noted in the report that it has also “widened the gap between homeowners and renters in America.”

“Homeowners have seen their wealth increase significantly over the past year, while renters have missed out on those gains and are now grappling with rent inflation,” Fairweather explained. “The silver lining is that housing values didn’t just climb in large affluent cities. Homeowners in rural America, who don’t normally see substantial home-value increases, also reaped the benefits of a booming housing market.”

The report goes on to note that rural home values were up 46.2 percent year-over-year in November, which outpaced the 31.3 percent rise for urban homes. Suburban home values rose 25.9 percent year-over-year in November.

As with the rise in home values generally, the report attributes the success of rural property to the growth of remote work.

“While cities have been bouncing back from a coronavirus slowdown, rural areas remain more popular than they were before the pandemic as remote workers continue to seek extra space and relative affordability,” the report explains.

Also somewhat surprisingly, the value of condos in the U.S. rose 42.7 percent year-over-year in November, which outpaced the 30.1 percent gains that single-family homes scored. The report attributes this situation to the bigger hit condos took early in the pandemic, followed by the later easing of lockdowns and the return of city life.

Among cities in the U.S., Austin saw homes jump in value 48.1 percent in November compared to one year prior, earning the Texas city the top spot among metro areas that saw home values rise. Other cities that saw gains include Jacksonville, Florida and Phoenix, Arizona.

Fairweather notes in the report that northern cities might rise in popularity in the near future thanks to their relative affordability. But so far at least, the Sun Belt has proven to be the destination du jour.

“Homebuyers have flocked to Sun Belt states during the pandemic,” the report notes, “as remote work has allowed them to prioritize affordability over proximity to the office.”

Email Jim Dalrymple II





Source link

Share:
WordPress Lightbox