A new Zillow analysis reveals that the U.S. housing market is worth a record $55.1 trillion—$20 trillion more than what it was worth in 2020 at the beginning of the COVID-19 pandemic.
However, it’s important to note that the change in wealth varies by region. States located in the Sun Belt are cooling, while homes in the Northeast and Midwest are gaining traction. A recent ATTOM report confirms this, as the housing market in Southern states was considered riskier for owners.
States with high populations saw the largest total value gains since 2020:
- California ($3.4 trillion)
- Florida ($1.6 trillion)
- New York ($1.5 trillion)
- Texas ($1.2 trillion)
While the top four states saw growth since the pandemic, three of them lost significant value in the past year. According to the analysis, Florida’s housing market dropped by $109 billion, California fell by $106 billion and Texas lost $32 billion.
Nationally, the housing market reached a new record, but it’s slowing down as far as growth is concerned—with the U.S. housing market gaining $862 billion in the past year, or 1.6%.
Orphe Divounguy, a senior economist at Zillow, said, “Even as buyers struggled with rising costs, U.S. housing wealth kept climbing.”
Although most of the top states fell in the past year, New York stands among the rest with the biggest gain of any state at $216 billion in the past year, accounting for a quarter of the national growth. New York was followed by New Jersey at $101 billion, Illinois at $89 billion and Pennsylvania at $73 billion.
Zillow researchers explain that Southern states as well as some Western states are cooling in growth due to massive gains in home value coupled with rising insurance costs. A recent report from S&P Cotality also confirms that the South is slowing down in home price gains, while rising in inventory.
According to the report, new construction added $2.5 trillion to the market since 2020, accounting for nearly 12.5% of the nation’s total gain. States that had the biggest demand during the pandemic have the biggest share of housing market gains from new construction.
From new construction alone, Utah gained 23%, Texas and Idaho grew about 22% while Florida gained 20%.
Zillow reports that there are nine metropolitan areas with a housing market worth more than $1 trillion. Together, they account for a third of a nation’s housing wealth at 31.9%. The top cities are:
- New York, New York ($4.6 trillion)
- Los Angeles, California ($3.9 trillion)
- San Francisco, California ($1.9 trillion)
- Boston, Massachusetts ($1.3 trillion)
- Washington. D.C. ($1.3 trillion)
- Miami, Florida ($1.2 trillion)
- Chicago, Illinois ($1.2 trillion)
- Seattle, Washington ($1.1 trillion)
- San Diego, California ($1 trillion)
Despite their value, all but New York lost a combined total of $18 billion in the past year. New York was a major outlier, gaining the most value out of any metro at $260 billion.
Zillow researchers suggest that accumulation of wealth in New York is largely due to changes in work environments—moving away from in-person to hybrid or fully remote work—and affordability hurdles.
“New construction opened the door for many first-time homeowners, creating trillions in wealth that didn’t exist five years ago,” Divounguy said. “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.”
For the full report, click here.
