U.S. home values surged, recapturing the $2.9 trillion decline caused by rising mortgage rates between June 2022 and February 2023. Despite sluggish demand, home values remain historically high due to limited supply as few sellers are putting homes on market. Fixed-rate mortgages contribute to this stability by dissuading homeowners with low pandemic rates from selling, while fierce competition among buyers for the limited housing inventory further sustains values.
With over 90% of homeowners enjoying mortgage rates below 6%, only 1% of home transfers occurred in a decade. The U.S. housing market divides into winners—current owners benefiting from growing equity—and losers—first-time buyers grappling with steep costs and minimal options in the market.