Unfazed by the recession, wealthy Americans are looking to upsize their homes in the pandemic. Demand for million-dollar homes is climbing faster than any other price point, Bloomberg reports.
Applications for mortgages larger than $766,000 increased 59% year over year in September, the largest uptick of all price segments, according to the Mortgage Bankers Association. The increase for mortgages from $150,000 to $300,000 rose just 13% in comparison.
Sales of homes in the $750,000 to $1 million price range have increased 85.5% over the last year, while sales of homes worth $1 million or more increased 106.5%. On the other hand, sales of homes in the $250,000 to $500,000 price range increased only 36.2%, according to data from the National Association of REALTORS®.
In October, NAR Chief Economist Lawrence Yun told NPR that for people with financial resources, “they are just going all in” and purchasing larger homes to help ride out the pandemic.
Wealthy house hunters are searching for large homes in the suburbs. Home builders like Toll Brothers are seeing the uptick in demand. “We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers,” CEO Douglas Yearley said in the company’s earnings statement this week. He said that low mortgage rates and “a renewed appreciation for the home as a sanctuary” were boosting demand. “The work-from-home phenomenon is also enabling more buyers to live where they want,” he added.
Source: “Million-Dollar Homebuying Soars With U.S. Rich on Shopping Binge,” Bloomberg (Dec. 8, 2020) and “Housing Boom: Sales of Million-Dollar Homes Double,” NPR (Oct. 22, 2020)
