Chicago, Phoenix among the latest major cities to reach elusive $1 trillion property milestone

Four more US cities now have housing markets worth more than $1 trillion compared to a year ago. 

The number of metros where the total values of homes topped $1 trillion has doubled to eight, according to new data from Redfin. 

Anaheim, California, Chicago, Phoenix and Washington, DC, have now reached the staggering milestone, as home values across the US have soared. 

The cities join New York, Los Angeles, Atlanta and Boston in the trillion-dollar club. 

The total value of the US housing market grew 6.6 percent in the last 12 months, according to Redfin. Homes gained a huge $3.1 trillion in value to reach a record $49.6 trillion.

Anaheim, California, which is located just outside Los Angeles, is known for being home to the Disneyland resort and two professional sports teams: the Los Angeles Angels and the Anaheim Ducks.

The city saw its home values rise a remarkable $121 billion in the last year, due, in part, to new development and investors moving in.

The larger cities of Chicago, Washington, DC, and Phoenix, saw home values jump by $84 billion, $67 billion and $52 billion in the last year, taking them over the $1 trillion threshold.

It is worth noting, Redfin said, that while San Francisco's aggregate home value is roughly $700 billion, when combined with neighbors Oakland and San Jose, the combined Bay Area housing market is worth nearly $2.5 trillion.

Likewise, the combined metro areas of Dallas and Fort Worth also surpass the $1 trillion mark, being worth $734 million and $294 million, respectively.

Home values across the US are being pushed higher because supply is still being outweighed by demand.

The number of homes on sale remains low compared to before the pandemic, with many homeowners staying put as they have mortgages far below the current rate. 

While elevated mortgage rates are keeping many buyers on the sidelines as well, there are still enough buyers to compete over a relatively small pool of homes, said Redfin, and that demand is driving values up.  

'The value of America's housing market will likely cross the $50 trillion threshold in the next 12 months as there are not enough homes being listed to push prices down,' said Redfin Economics Research Lead Chen Zhao.

New construction of homes has also helped drive up an overall increase in market value, according to Redfin. 

The total value of US homes has more than doubled in the past decade, climbing nearly 120 percent from $22.7 trillion in June 2014.

It comes as mortgage rates have begun to fall slightly ahead of a predicted interest rate cut from the Federal Reserve in September. 

Rates dropped to their lowest level since April 2023 early this week, falling to a daily average of 6.34 percent on August 5, according to a separate report from Redfin.  

Benchmark borrowing costs do not directly affect mortgage rates, but home loan costs will dip when banks think a future cut is likely.

But Zhao forecasts that this could boost home prices - at least in the short term.

'Mortgage rates have started falling, but many potential sellers and buyers are waiting to make a move, meaning we are likely to continue seeing a pattern where prices slowly tick up,' she said.

'That's great news for the millions of American homeowners who see their equity rising, but first-time buyers are going to keep finding it tough to find an affordable home.'