Nov 17, 2023 - Economy

Homes for the rich thrive, while others are locked out

Illustration of a diamond key in a velvet jewelry box.

Illustration: Maura Losch/Axios

Luxury home sales are up in nearly a third of the largest U.S. metros, per a recent Redfin report.

Why it matters: A difficult market isn't so difficult if you have a lot of cash.

What they're saying: "Buyers in this segment tend to be more financially equipped to weather the climbing costs than the typical home shopper," economic researcher Hannah Jones tells Axios.

What's happening: Luxury housing supply rose 3% across the U.S., and sales surged more than 30% in some metros, including Tampa and Las Vegas.

  • Meanwhile, non-luxury home sales were down in every major U.S. metro, and non-luxury supply is down 21%, according to Redfin.
  • Luxury home prices rose 9%, compared to just 3.3% for non-luxury homes.

The intrigue: A growing share of luxury buyers are paying in all cash (43%) or weathering high mortgage rates in hopes of refinancing later, per the report.

  • "This tells us that wealthy buyers are still resilient and have plenty of purchase power," Redfin chief economist Daryl Fairweather says.

Between the lines: Affluent folks have the resources to buy and move right now. But most Americans are locked into their homes or sidelined.

Yes, but: Not every market is experiencing the luxury boom. In some cities, sales are down more than 20%, including New York, Philadelphia and Baltimore.

  • "High costs and still-high mortgage rates could deter buyers in the coming months

The bottom line: The luxury real estate market isn't as burdened by high mortgage rates and home prices.

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