In another sign of the pandemic housing boom, a record number of homes are now worth at least $1 million. According to new data from Redfin, 8.2% of U.S. properties were valued at $1 million or more last month, nearly double the pre-pandemic share. Daryl Fairweather, Chief Economist at Redfin, breaks down the data and what it means for millions of American families.

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A Record Number Of U.S. Homes Now Worth $1 Million

and here to break this down in what, what it all means is Daryl Fairweather, chief economist at Redfin Real glad to have you on this morning. What are your biggest takeaways from this analysis, buying a home is much more expensive. There was a short period of time, the start of the pandemic where you get a home for a deal at a low mortgage rate. But those times are over now, prices are much higher than they were before. The pandemic and mortgage rates are on the rise. So buying a home is really expensive for anybody out there. Yeah. You know, I have relatives that I know that are interested in kind of, you know, upgrading their house right now and excited about the current value of their home. But then you look at on the buyer side and it's like, whoa, it's a little scary to give up what you got and then pay more for for something else. I'm curious what you think is still driving this red hot housing market and our pandemic trends, you know, like kind of the remote work situation obviously that we saw over the last year or so, is that still affecting the housing market and the momentum. And if so for how long It's really a matter of supply and demand. We have a lot of demand for homes. Millennials are entering into home buying age were the biggest generation and we didn't build enough homes to meet that demand. We built fewer homes and the 2010s and in any decade going back to the 1960s. So when you have a lot of demand and very little supply, it just leads to very high prices. You noted interest rates. Obviously the Fed's decision on interest rates that's coming down later today, at least the initial decision on this first rate hike, the impact of higher interest rates, what do you think that's going to be in the housing market, you know, in the short term? And then over the long term, certainly as we see potentially more interest rate hikes, it's going to make it more expensive to borrow money to buy a home. And that should slow down demand. We've already seen mortgage rates go up this year and demand has remained strong because there's just so much demand out there, there's more people than there are homes. But I think eventually, as mortgage rates do rise, we should see demand start to taper off and the housing market will be more balanced. That's good news for anybody who has just been frustrated by losing out in bidding wars and dealing with such a competitive market. But overall, the market will be more expensive because it costs more to borrow. Well, I was gonna say that, you know, while it may be excited that you don't have to have these bidding wars, that reality is over the course of your mortgage, you're technically paying higher, you know, in the back end with the higher interest rate, which is why, you know, over the last year, I think back to the people that we've had on the show, you know, talk about while housing prices are higher interest rates are lower. So you still kind of probably net make out a little bit better the rising cost of housing, obviously that's leaving many families behind, you know, both from the kind of immediate initial rate, um you know, in the home buying side, but even I think even the renting side of things, you know, it's seemingly even with interest rates rising and home prices still being elevated, looks like it's pushing kind of homeownership further and further out of the reach of more americans at a time where he noted a moment ago, demand is higher. There are more americans that want to kind of buy a home. Can you talk about this dynamic a little bit? Well, one of the problems is that we just aren't building enough homes for everybody who wants them and that comes down to things like exclusionary zoning. We make it very hard to build multi family housing in this country. And also just where all the opportunities are concentrated, there's a really great job market in san Francisco los Angeles new york, everybody wants to be there for the jobs and the housing is so expensive. Now with remote work and the fact that labor market is doing well all across the country, I'm optimistic that people will be able to move to places where they can have more disposable income and lower housing costs, but not everybody is able to move somewhere where they can have a better economic outlook for themselves and people are just stuck in place. I'm curious obviously, you know, the housing market is dealing with what we're seeing on a broader macro level around, you know, other spaces in terms of there's a supply and demand kind of mismatch that has led to kind of the rise in prices. Um, and obviously now we're dealing with interest rates, what do you think can be done to kind of bridge the gap, so to speak, in the housing market right now, this problem has been a decade in the making. So it's not something we're going to solve overnight, but we do need to solve it. And what we need to do is just make it easier to build more homes. So that means eliminating single family zoning, where that is restricting the supply of homes. It also might mean subsidizing construction of new homes or at least getting rid of red tape to make it easier to build. But part of this problem is being solved a bit on its own because people are leaving the really expensive areas and going to more affordable areas and that alone should at least balance out the housing market nationally in terms of the legislative measures that you mentioned, I imagine their legislative measures, you know, who exactly has the control and how quickly could something like that. Um, you know, actually take place from from start to finish when it comes to things like zoning. It is not the federal government that really has a lot of power here, It's state government, it's the local government and that's why it's so important for people to get involved in their local government and really think about these issues, California has eliminated single family zoning statewide, but a lot of the zoning rules come down on just two the local neighborhood and their roles. So it's great to get involved and have a voice there and be a voice for building more housing as opposed to just protecting the property values if you're already a homeowner. I'm glad you pointed out when I was a local news reporter every four years when we cover kind of the major presidential election and see so much excitement around that. I'm sitting here talking to people like you got to focus on, you know, the most immediate kind of your local, um, you know, lawmakers that really affects the bulk of your life. So glad you pointed it out. Daryl Fairweather, chief economist at Redfin, thank you so much