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AUSTIN (KXAN) – Homes costing more than $1 million are becoming less common in the U.S. and in Austin, according to a Redfin analysis.
In June 2022, 8.6% of U.S. homes were worth more than $1 million. Six months later, in Jan. 2023, this percentage dropped down to 7%, according to the analysis.
The trend is similar in Austin, where in January 2022, 11.3% of homes were valued higher than $1 million, and by January 2023, only 10% of Austin homes were worth seven figures, according to Redfin. Other Texas cities have much fewer homes that cost over $1 million than Austin. In El Paso and McAllen, for example, less than .5% of homes are worth seven figures.
Though prices are coming down, the share of homes worth over $1 million now is still much greater than before the pandemic. In January 2020, only around 4% of homes nationwide cost over $1 million.
An economics researcher from Redfin said just because house prices are cooling does not mean homebuyers are getting a break.
“The typical homebuyer’s monthly mortgage payment is even higher than it was when home values peaked in the spring because rates are so much higher, and although home prices have come down, they certainly haven’t crashed. Now isn’t the time for buyers who need to take out a loan to get a good deal: Buying an $800,000 home today would cost more per month than buying a million-dollar home a year ago,” Redfin Economics Research Lead Chen Zhao said in a press release.
“With today’s 6.6% mortgage rates, a buyer who made a 20% down payment would pay $5,241 per month for an $800,000 home. With the 3.5% rates common in early 2022, that same buyer would pay $5,034 per month for a $1 million home,” according to Redfin author Dana Anderson.
The analysis Redfin conducted uses the Redfin Housing Value Index—a model that incorporates the Redfin Estimate, public records and MLS data to estimate the current and historical value of more than 99 million properties in the U.S.