Just How Bad Is The Housing Market? Trillions In Losses, Biggest Percentage Drop Since 2008

According to a Redfin Corp RDFN analysis looking at estimates on more than 99 million U.S. residential properties, the total value of all U.S. homes was $45.3 trillion at the end of 2022.

Sounds like a lot, right? Well, the total value of U.S. homes peaked at a record high of $47.7 trillion back in June of last year.

This means that since the peak in June, American homeowners have collectively lost $2.3 trillion in the value of their homes. To put this into perspective, $2.3 trillion is roughly equivalent to the GDP of Texas in 2022. Texas has the second-largest economy by GDP in the U.S., after California.

From last year's peak to what is currently (and hopefully) a trough is the largest June-to-December drop in percentage terms since the 2008 housing market crash.

The decrease in the value of U.S. homes is attributed to declining demand from homebuyers, leading to the falling prices of homes, Redfin said.

Median home sale prices were $383,249 in January, down 11.5% from a peak of $433,133 in May.

Read also: What's More Expensive: Buying A House, Or Building One?

Florida’s housing market, however, has been holding value relatively well compared to other metropolitan areas.

The total value of homes in Miami rose 19.7% year over year to $468.5 billion in December, marking the largest annual increase in percentage terms among the metros analyzed by Redfin.

Millennials, who are currently at a prime home-buying age, have reaped significant value gains, with the total value of homes owned by millennials rising 26.7% year-over-year to $5.6 trillion in the third quarter of 2022.

Gen-X and Baby Boomers have also seen significant increases in total home value, while the Silent Generation (which preceded the Boomers) has seen a decrease in home value.

Further, despite the rise in natural disasters, the value of homes in places that face high risk from climate change has remained the same or has increased, due to factors including increased interest in owning coastal property and the fact that climate risk may not yet fully be priced into the market.

Read next: First Jeff Bezos, Now Elon Musk Making A Play In The Single-Family Housing Market