Low inventory is keeping competition high and home values rising

• There are currently 550 U.S. cities where the typical home value is $1 million or more, up from 491 a year ago.
• California easily boasts the most million-dollar cities, followed by New York and New Jersey.
• Florida, Texas and Delaware are the only states with a net loss in million-dollar cities over the past year.

SEATTLE, April 2, 2024 /PRNewswire/ -- The U.S. has a record-high 550 "million-dollar" cities — cities where the typical home is worth $1 million or more — a new Zillow® analysis shows. That is 59 more million-dollar cities than a year ago,¹ reversing losses from when home values were wobbling this time last year.

A tight housing market with few homes available has kept home values rising, even while affordability challenges have hampered buyers. The good news for buyers in the market this home-shopping season is that new listings are on the rise as the effects of "rate lock" — occurring when homeowners are financially incentivized to keep their current home because of the low rate on their current mortgage — are weakening, and the hope for lower mortgage rates later this year may mean a second wave of buyer demand this summer.

"Affordability is still a big challenge for buyers, but that hasn't stopped prices from growing," said Anushna Prakash, an economic research data scientist at Zillow. "Buyers this spring are going to see more options to choose from, but they'll also see a lot of other buyers wandering through the same open houses. Competition will stay fierce, especially for the most attractive and well-priced homes. If mortgage rates drop later this year, as many expect, we may see a surge in million-dollar cities as even more buyers jump in and drive prices higher."

While million-dollar cities were affected more than the typical U.S. city when home values fell in late 2022, they have generally tracked with the national market over the past year. The typical U.S. home is worth 4.2% more than it was a year ago. In current million-dollar cities, the median year-over-year home value growth is 4.6%.

California is home to 210 million-dollar cities, more than the next five states combined. New Jersey has added the most million-dollar cities over the past year, gaining 14.

Florida, Texas and Delaware are the only states to have a net loss in million-dollar cities over the past year. Florida lost three million-dollar cities — Siesta Key, Santa Rosa Beach and Sanibel — while adding one, the Village of Palmetto Bay, near Miami. Texas lost two million-dollar cities in the Austin area, Sunset Valley and Volente, and added Bellaire, outside of Houston. The typical home in Delaware's Dewey Beach fell below the million-dollar cutoff.

The New York City metro area, which includes parts of New Jersey and Pennsylvania, has the most million-dollar cities with 106 — 24 more than a year ago. San Francisco is next with 69, followed by Los Angeles with 63. Other than the New York City metro area, Los Angeles gained the most million-dollar cities over the past year, adding seven. Boston added four during that time, and San Diego, Chicago and San Luis Obispo each added three.

Whether a buyer or renter is searching for a home in a million-dollar city or somewhere with home values closer to average, Zillow has tools that can help.

An affordability calculator can help a buyer better understand what they can afford and set a budget. Buyers can then use Zillow to search for homes filtered for a monthly cost they are comfortable with, instead of only by list price. Buyers can also find and connect with a knowledgeable real estate professional and loan officer on Zillow to help guide them through the home-buying process.

About Zillow Group:

Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated partners and agents, and easier buying, selling, financing and renting experiences.

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All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2023 MFTB Holdco, Inc., a Zillow affiliate.

¹ February 2023 Zillow Home Value Index (ZHVI) figures are unavailable for 11 cities with ZHVI above $1 million for February 2024.

SOURCE Zillow