Despite the plethora of challenges faced over the past few years, the American economy has continued to grow, and that growth has been an important driver of real estate value. The total value of household real estate was at the third-highest level ever recorded in the most recent Flow of Funds data, totaling $48.1 trillion, a gain of $3.2 trillion or 7% from the prior year. Homeowner equity in real estate was similarly near record highs at $34.7 trillion, up more than $2.8 trillion (8.8%) year over year.聽
Gains in real estate value were largest among the top half of the wealth distribution. Even so, real estate value comprised just 18.7% of total assets among the 10% wealthiest households, down from 19.9% just two years prior. Put simply, despite gains in value, real estate was a smaller portion of the erage portfolios of the wealthiest 10% in late 2024. Meanwhile, corporate equities and mutual fund shares comprised 36.3% of the assets of the 10% wealthiest households, the highest share ever recorded. The combo of significant stock market wealth and relatively low debt in real estate among the portfolios of the wealthiest 10% suggests that there is more capacity for real estate growth among this cohort. However, it must be acknowledged that the recent market response to tariffs has likely dropped corporate equities back to one-third of the asset portfolio of the wealthy, or roughly where it was at the end of 2023.聽
The high end has outperformed the median
Because higher-end homeowners he substantial equity and are less reliant on mortgage financing, these types of properties he outperformed. Data from the National Association of Realtors庐 suggests that the $1 million-plus category has been the fastest-growing (or least-declining) sales segment for 21 months straight, and sales in this segment now account for 7.6% of the market compared with 5% in February 2023, just before the streak of outperformance began.
Source: National Association of Realtors
And demand remains relatively steady
In listing data, we see similar signs of the growing importance of high-end homes and a relatively healthier interest from high-end-home buyers. In contrast with sales trends, listings priced above $1 million shrank as a share of for-sale properties in early 2025. They comprise an erage of 12.8% of all for-sale properties year to date in 2025, slightly below the 13.6% share seen at this time in 2024.聽
Nevertheless, market balance indicators suggest that high-end homes remain more in demand. Time on the market for high-end homes has edged down from 76 days to 75, while time on the market for properties priced below $1 million has risen from 58 to 64. Similarly, price reductions he risen from 20.8% to 22.6% among homes priced below $1 million compared with rough stability at 13% to 13.6% among high-end homes.
Listing Trends
Million-dollar-plus listings Jan to Mar 2024 Jan to Mar 2025 Year over year Share of for-sale properties 13.6% 12.8% -0.8 ppts Time on Market 76 75 -1 day Price Reductions 13.0% 13.6% +0.6 pptsSub-million-dollar listings Jan to Mar 2024 Jan to Mar 2025 Year over year Share of for-sale properties 86.4% 87.2% +0.8 ppts Time on Market 58 64 +6 days Price Reductions 20.8% 22.6% +1.8 ppts
Source: Realtor.com
Stock market performance has an outsized impact on high-end-home buyers. Corporate equities he been an important contributor in recent years, and predictions made in late 2024 were generally for a bullish 2025, with growth projections ranging from +9% to +19%. However, in the first quarter of 2025, the market saw not only a new record high, but also a sizable retreat from it as markets grappled with on-again-off-again tariffs and uncertainty over the impact of the Trump administration鈥檚 policy decisions.聽
Deregulation, a more nimble federal workforce, and getting promised tax cuts across the finish line could be net positives for both economic growth and financial markets. However, policy uncertainty could be a boon for high-end real estate as investors seek the reliability of a tangible asset rather than the volatility of stocks. However, 2025 has also already highlighted very real risks in the form of wildfires on both coasts, and climate risks that are widely, but not uniformly, distributed are likely to be an important consideration for future buyers.
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