Key Takeaways
- U.S. homes were worth more in 2023, with value rising 5.3% or $2 trillion to $47.5 trillion total.
- To put that into context, that value is more than the ever-growing national debt.
- Despite high interest rates, home prices keep pushing up because of the lack of houses for sale.
If you keep track of the estimated value of your home on a listing website, you probably won’t be surprised to hear that houses have gotten more valuable this year. But added together, the total increase was massive—to the tune of 13 digits.
The value of U.S. homes increased by $2 trillion in 2023, to a total $47.5 trillion as of December according to data from online real estate company Redfin. The housing stock is worth so much that in theory, if it were sold off it would more than cover another massive and ever-growing number, the national debt, which averaged $33.9 trillion in December.
The 5.3% rise in home values over the year was the largest in 11 months and highlighted the paradox of the current housing market that isn’t really working for anyone. Demand for houses has slumped because so few people can afford them, yet prices have continued to rise nonetheless because selling them has also gotten less appealing. Few sellers want to give up an under-3% rate on a 30-year fixed mortgage they got during the pandemic for a loan that would sit at just under 7% today.
“America’s homeowners are sitting pretty. They’re holding a massive amount of housing wealth, despite lackluster demand from buyers, because home values skyrocketed during the pandemic and now a supply shortage is preventing those values from falling,” Redfin Economics Research Lead Chen Zhao said in a press release. “Prospective buyers aren’t as lucky.”
The figures are based on Redfin’s property valuation estimates and are not seasonally adjusted, which is why the chart shows a downturn in recent months: Home sale values typically fall in the winter and rise again during the spring homebuying season.
Forecasters expect mortgage rates to fall this year, which should provide some relief to first-time buyers. Between those soaring prices and high mortgage rates, the monthly mortgage and interest payment to purchase the median-priced home has nearly doubled to $2,111 since just before the pandemic, according to the Federal Reserve Bank of Atlanta.
