US Housing Market Now Valued At $6.9 Trillion: Report

The U.S. housing gained a record-breaking $6.9 trillion in value during 2021, according to new data report from Zillow Group Inc. Z (NASDAQ: ZG). That is nearly double the previous record-breaking annual gain of $3.7 trillion seen in 2005.

What Happened: Zillow said the full U.S. housing stock is now worth $43.4 trillion, which was fueled by strong demand in a market with limited supply. Home values grew 19.6% last year, an all-time high in more than two decades of Zillow's data records.

“Not only did prices rise faster than ever, but more homes were built than in any year since 2007 as builders raced to meet demand,” observed Zillow Senior Economist Jeff Tucker, who also acknowledged that many first-time homebuyers faced a challenging environment for securing residential property.

“This year is likely to be less competitive for buyers, but it will continue to be a sellers’ market,” Tucker added.

Related Link: Affordable Home Sales Are Up While Luxury Home Sales Decline: Report

What Else Happened: The balance of housing market vibrancy was somewhat uneven during 2021. Zillow also noted that the top one-third of highest-valued homes accounted for 60.8% of the total market value, while the lowest-valued one-third accounts for 12.8%.

Fourteen states have more than $1 trillion in housing value, with four states passing the $1-trillion mark for the first time: Colorado (now worth $1.2 trillion), North Carolina ($1.1 trillion), Georgia ($1 trillion) and Arizona ($1 trillion).

Furthermore, more than one-fifth of the nation's housing value (21.3%) was based in California, where the housing stock gained $1.4 trillion in 2021 and is now worth a total of $9.2 trillion — more than the combined value of the bottom 30 states.

On the other end of the spectrum, New York lost more market share than any other state, falling from 7.8% of the U.S. market in 2020 to 7.3% last year. Still, New York’s housing stock value climbed from a total value of $2.8 trillion to $3.2 trillion.

On a metro level, the nation’s largest markets were New York City ($3.5 trillion), Los Angeles ($3.3 trillion), San Francisco ($2 trillion), Boston ($1.1 trillion) and Washington, D.C. ($1.1 trillion).

Several metro-level anomalies were seen in 2021: Phoenix’s housing market gained $171 billion in value last year, more than the entire state of Pennsylvania gained, while Austin's housing market gained more Houston's despite having less than one-third of the number of homes.

Also Happening: In separate data, the Mortgage Bankers Association's (MBA) latest monthly Loan Monitoring Survey reported the total number of loans now in forbearance decreased by 26 basis points from 1.67% of servicers' portfolio volume in the prior month to 1.41% as of Dec. 31.

The MBA estimates 705,000 homeowners are currently in forbearance plans.

"The share of loans in forbearance continued to decline in December 2021," said Marina Walsh, MBA's vice president of industry analysis. "This was especially the case for government and private-label and portfolio loans, as those loans have higher levels of forbearance than loans backed by Fannie Mae FNMA and Freddie Mac FMCC. With the number of borrowers in forbearance continuing to decrease below 750,000, the pace of monthly forbearance exits reached its lowest level since MBA started tracking exits in June 2020."   

Photo: Pix4Free.