Prices of non-luxury homes rose at roughly half the pace; they were up 4.6% to a median of
Redfin defines luxury homes as those estimated to be in the top 5% of their respective metro area based on market value, and non-luxury homes as those estimated to be in the 35th-65th percentile based on market value.
Luxury prices are rising largely because demand for high-end homes has held up better than demand for middle-of-the-road homes. Sales of luxury homes are on the upswing, partly because many high-end buyers are undeterred by high mortgage rates, with the share of luxury homes bought in cash sitting at record highs. New listings of luxury homes are soaring-but not enough to curb the price growth that comes with rising demand; the total supply of luxury homes is still far below pre-pandemic levels.
'People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,' said
Luxury home sales rise for first time since 2021 as record share of affluent buyers pay cash
Sales of luxury homes rose 2.1% year over year in the first quarter. Luxury sales started posting year-over-year increases in January for the first time since
Sales of non-luxury homes decreased 4.2% year over year. Non-luxury sales haven't posted an increase since the end of 2021.
Sales are growing for luxury homes and declining for non-luxury homes largely because so many affluent buyers are able to pay in cash, meaning today's elevated mortgage rates don't deter them from purchasing homes. Nearly half (46.8%) of luxury homes bought during the three months ending
The weekly average 30-year fixed mortgage rate has hovered between 6.6% and 7% since the beginning of 2024, more than double pandemic-era record lows. Elevated mortgage rates have driven down demand for the average American homebuyer, but rates are irrelevant to cash buyers.
Supply of luxury homes for sale posts biggest year-over-year increase on record
The total number of luxury homes for sale rose 12.6% from a year earlier in the first quarter, the biggest increase on record. That's compared with a 2.9% decline in non-luxury inventory.
New listings of luxury homes soared 18.5% from a year earlier in the first quarter, the second consecutive quarter of double-digit increases. That's roughly seven times bigger than the 2.7% increase for non-luxury homes.
Supply of luxury homes is shooting up for several reasons. One, the mortgage-rate lock-in effect has a lesser impact on luxury homeowners because they're more apt to buy their next home in cash or be in a financial position to take on a higher rate. Two, owners of luxury homes, many of whom have a lot of equity, are putting their houses on the market to cash in while prices are at record highs. Three, luxury supply had a lot of room to grow, as it was sitting at low levels during the first quarter of 2023.
It's worth noting that while luxury inventory is on the rise, total supply and new listings are below typical pre-pandemic first-quarter levels. Relatively low inventory is one reason luxury prices are increasing.
Metro-Level Luxury Highlights: Q1 2024
Redfin's metro-level luxury data includes the 50 most populous
Prices: The median sale price of luxury homes rose most in
Sales: Luxury home sales rose in just over half the metros. They increased most in
Active listings: The total number of luxury homes for sale increased most in
New listings: New listings of luxury homes increased most in
Speed of sales: Luxury homes sold fastest in
10 Most Expensive
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