As the saying goes, a rich man is nothing but a poor man with money — and real estate.
More than 13% of the country’s real estate assets are owned by the wealthiest 1% of Americans — a circumstance that significantly enriched the well-heeled over the past two years of sky-high rates and housing shortages. The 1% has been so enriched, a recent Redfin analysis revealed, that their combined wealth could now feasibly purchase almost every home in the nation.
The analysis further concluded that the top 0.1% alone could purchase every single home in the country’s 25 most populated metro areas, from New York City to San Antonio.
“It is a striking example of the concentration of wealth in America that the top 1% could hypothetically afford to buy every home in the country — without going into debt — while millions of households struggle to buy or hold onto just one,” said Chen Zhao, Redfin’s economics research lead, in the report.
This stark disparity comes at a time when an outsized percentage of Americans believe that homeownership is no longer a realistic milestone.
To gain entry into the 1% club, according to the Federal Reserve, a minimum net worth of $11.2 million is required. An estimated 1.3 million American households claim membership, and their combined net worth totals $49.2 trillion. Real estate helps put this gargantuan number into perspective — the combined value of 100 million US homes is $49.7 trillion.
It’s these two eye-popping measures upon which Redfin based its report, using Federal Reserve data and the estimated value of 98 million US properties. While net worth and aggregate home values are not directly related, the Redfin analysis demonstrated how the two measures have pretty much tracked together for the last 20 years.
According to Redfin, aggregate home values exceeded the 1%’s collective wealth from 2000 until the housing and global financial crisis of 2008. The wealth of the top 1% surpassed home values through the 2010s until a steep drop-off after 2020, when the market disruption of COVID-19 hit the heavily invested portfolios of the rich.
But America’s fat cats have clawed their way back. The richest 0.1% of Americans grew their wealth by $4.4 trillion, or 25%, in just two years, Redfin reported.
If the 0.1% pooled only that $4.4 trillion earned between 2022 and 2024, they could buy every home in the Chicago, Atlanta, Boston and Houston metro areas, according to Redfin. Their two-year gains exceed the combined wealth of America’s bottom 50%.
Asset growth has long outpaced wage growth, which makes real estate one of the most valuable investments a person can make. Almost half of the bottom 50% of Americans’ net worth is tied up in real estate. And while the assets of the 1% dwarf those of the bottom 50%, the latter group claims the highest total mortgage debt at $3.1 trillion, Redfin reported.
The analysis adds credence to the frustration of everyday Americans, already discouraged by a real estate market in which the median listing price has long surpassed $400,000. The median age for first-time buyers is 38 — the oldest on record.
