Million-dollar listings are a hot commodity. The number of homes sold for more than $1 million jumped by 81% in February compared to a year earlier. Meanwhile, the number of homes sold for under $100,000 dropped 26% compared to a year ago, according to data from the National Association of REALTORS®.
Wealthy Americans are taking advantage of low mortgage rates, increased savings, and the growth in remote work in order to hunt for larger homes.
The Midwest saw the volume of homes sold for above $1 million double from February of this year compare to last year. The Northeast saw a 98% increase and the South posted a 94% increase.
Economists note that a shortage of homes for sale in the $250,000 and lower category as well as job losses in lower wage earning categories of the economy may be the culprit behind the drop in sales in the lower price brackets.
“There are people who have become much wealthier as their stock portfolios rise and they aren’t spending money on other things besides housing,” says Daryl Fairweather, Redfin’s chief economist. “They are not going out to restaurants or on vacations, and they want to spend their money on housing, spending more time at home.”
Luxury homes are selling faster than they have in the past too. The typical luxury home for sale during the first three months of this year spent 61 days on the market, which is 38 days fewer than a year ago, USA Today reports.
Source: “Flush With Cash, Affluent Americans Are Chasing Million Dollar Listings,” USA Today (April 21, 2021)
