The median price of a U.S. luxury home reached $1.26 million in September. A recent report shows that luxury prices rose more than twice as fast as those of non-luxury homes nationwide.
Luxury Real Estate Market Grows Despite High Mortgage Rates
According to data from Redfin, the latest median price for U.S. luxury homes in September is 4.8% higher than last year. The figure also marks the highest median luxury home price ever recorded for September. By comparison, non-luxury home prices rose just 1.8% year-over-year to roughly $372,000.
This trend is not new, though, as the rates of luxury houses in the U.S. have been surging more quickly than the non-luxury ones for the last two years. Redfin reports that luxury home prices have climbed 11% since 2023. In contrast, non-luxury homes saw a modest 6% increase.
Wealthier buyers have largely driven this trend, often using smaller mortgages or paying in cash. As a result, higher mortgage rates have had little impact on their buying decisions.
Meanwhile, many middle-income households continue to wait for more affordable housing options in the post-pandemic market. This is primarily due to record-high home rates and high mortgage rates.
Luxury and Non-Luxury Home Sales Stay Flat
Sales of both luxury and non-luxury homes remained largely flat compared to last year. In fact, overall sales activity hovered near the lowest September levels since 2012. Non-luxury sales slipped 0.3% year-over-year, while luxury sales edged up 0.3%.
The pending sales of luxury houses in the U.S. grew by 1.6% and by 1% for non-luxury ones from the previous year.
It should also be noted that the luxury housing inventory expanded 7.7% year over year, the highest for any September since 2020. Whereas this figure was higher for non-luxury houses in the country at 11.4%, the highest for any September since 2019.
Trends Across U.S. Metro Locations
West Palm Beach led the nation with a 14.8% jump in luxury home prices, reaching roughly $4.13 million. Newark and Virginia Beach had a 12.3% (at around $2.05 million) and 11.2% rise (at around $1.07 million), respectively.
Tampa (-3.3% to $1.45 million) and Oakland (-2.2% to $2.9 million) were the only two metro locations with price drops.
San Francisco saw the largest increase in luxury sales, up 30.5% year-over-year. Providence and Fort Worth also posted gains of 19.1% and 13.5%, respectively. Luxury sales dipped the most in Philadelphia (-16.8%), San Jose (-20.8%), and West Palm Beach (-22.4%).
Tampa recorded the fastest increase in luxury inventory, up 31.1%, followed by Fort Worth (18.7%) and Nashville (18.6%). Chicago (-14.8%), San Jose (-20.0%), and Philadelphia (-21.6%) had the lowest inventory growth.
The largest jumps in new luxury listings were in Tampa, Kansas City, and San Francisco at 21.5%, 20.6%, and 20%, respectively. Whereas, New York (-16.5%), Anaheim (-19%), and Jacksonville (-22.6%) had the lowest listings.
Luxury homes in San Jose were sold in just 14 days. St. Louis and Detroit saw the sale happen in 16 days. The slowest sales were observed in Miami, West Palm Beach, and Fort Lauderdale at 130 days, 115 days, and 114 days, respectively.
Despite elevated mortgage rates and subdued sales, the luxury housing market continues to show strong momentum across the U.S.
