Nearly 1 in 10 U.S. homes are worth at least $1M

Owning a $1 million home in America is no longer a status symbol, but is part of an alarming trend that has made homeownership a distant reality for millions.

According to real estate listing website Redfin, 8.5% of U.S. homes are now worth at least $1 million—the largest share ever recorded and 7.6% higher than a year ago. In actual numbers, more than 8 million homes have a $1 million or higher price tag.

By comparison, only 4% of U.S. homes were worth at least $1 million before the pandemic. This figure was 2% or less in the mid-2010s.

“The share of U.S. homes worth $1 million or more is at a record high because home prices are at a record high,” Redfin said in its report, citing the 4% annual rise in home prices in June alone.

Perhaps the most alarming trend is that a million-dollar price tag isn’t just limited to luxury homes but also ordinary properties in pricey states like California. For example, 80% of homes in San Francisco and San Jose are worth seven figures or more.

Soaring home values is “good news for homeowners but challenging for buyers,” Redfin concluded.

Americans who are trying to climb the wealth ladder through homeownership will struggle to get past the first rung in today’s market.

A market of haves and have-nots

For the average American, homeownership is one of the biggest predictors of wealth creation.

According to the Urban Institute, the average wealth gap between homeowners and renters has increased by a whopping 250% over the past 33 years. By 2022, that gap stood at $1.37 million, or $390,000 if using the more charitable “median” calculation.

“Housing wealth accounts for the highest portion of the wealth disparities between homeowners and renters,” the Urban Institute said in its report, which was released in April. “Fluctuations in home prices are highly correlated with the housing gap.”

Housing affordability challenges reveal a “tale of two Americas,” Creditnews Research reported in a 2024 ranking of the top 100 metro areas in the country. According to the report, middle-class families can afford an average home in just 52 of the 100 most populous metros—down from 91 just before the pandemic.

There’s no guarantee that buying a home in today’s market offers the same financial benefits it did in years past. In addition to soaring property values, today’s buyers must contend with elevated mortgage rates, higher insurance costs, and rising property taxes.

A separate Creditnews Research study found that owning a home at today’s prices and interest rates is more expensive than renting in all 100 of the country’s largest metro areas. In most of the metros studied the difference between renting and buying is more than $1,000 per month.