US housing market value hits record $55T, but growth is slowing

The total value of U.S. homes has climbed to a record $55.1 trillion, although growth has cooled in the past year amid high housing costs.

That figure represents a $20 trillion increase since early 2020 and an $862 billion gain over the past year, according to an analysis released Monday by Zillow.

But while the national market edged higher, several large states saw their housing values decline.

Florida’s housing stock lost $109 billion in the past year, California lost $106 billion and Texas lost $32 billion. Conversely, New York posted the biggest gain, adding $216 billion, or about one-quarter of the national increase.

“Even as buyers struggled with rising costs, U.S. housing wealth kept climbing,” Orphe Divounguy, senior economist at Zillow, said in the analysis. “New construction opened the door for many first-time homeowners, creating trillions in wealth that didn’t exist five years ago. Home value gains are a windfall for longtime homeowners, but they also highlight how housing deficits that sent prices soaring left behind many aspiring first-time buyers.

“The bottom line is that we need more homes to solve our chronic affordability crisis.”

Regional shifts

The report points to subdued markets in pandemic-era boomtowns across the South and Mountain West regions, while states in the Northeast and Midwest are driving much of current national growth.

Analysts attribute the shift in part to affordability challenges in the Sun Belt — where rapid price appreciation and higher insurance costs have eroded the region’s earlier advantages.

Since 2020, the biggest overall increases in housing values have come from California (+$3.4 trillion), Florida (+$1.6 trillion), New York (+$1.5 trillion) and Texas (+$1.2 trillion).

But three of these four states posted declines in the past year.

New construction

New homebuilding has added $2.5 trillion in housing value since early 2020, accounting for about 12.5% of the total gain nationwide, Zillow said.

The construction boom has allowed more households to enter the market and has contributed significantly to wealth creation — particularly in states that saw large population inflows during the pandemic.

Utah (23%), Texas (22%), Idaho (22%) and Florida (20%) led all states when measuring the share of housing market growth that’s tied to new construction.

Analysts say these additional homes helped ease affordability pressures and gave buyers more options.

The $1 trillion club

Nine U.S. metro areas now have housing markets valued at more than $1 trillion each — collectively accounting for nearly one-third of the nation’s housing wealth (31.9%).

They are New York ($4.6 trillion), Los Angeles ($3.9 trillion), San Francisco ($1.9 trillion), Boston ($1.3 trillion), Washington, D.C. ($1.3 trillion), Miami ($1.2 trillion), Chicago ($1.2 trillion), Seattle ($1.1 trillion) and San Diego ($1 trillion).