U.S. Housing Market Has Doubled In Value Since The Great Recession

The U.S. housing market has doubled in value since the Great Recession, after gaining $6.9 trillion in 2021. The figure nearly doubles what was previously thought the largest annual gain: $3.7 trillion in 2005. The full U.S. housing stock market is now worth $43.4 trillion, according to a new Zillow analysis. 

Strong demand went to war with limited supply in 2021, driving up home values to heights they’ve never reached before. Home prices increased 19.6%, according to Zillow’s data, an all-time high dating back more than 20 years. Meanwhile, economists are expecting another strong year in 2022. 

"Even in the context of a year in which several housing records were topped, the scale of the housing market's growth in 2021 is eye-popping," said Zillow senior economist Jeff Tucker. "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. Skyrocketing home values may be celebrated by longtime homeowners, but are daunting for those trying to buy their first home. This year is likely to be less competitive for buyers, but it will continue to be a sellers market."  

One-third of the highest valued homes in the nation made up  60.8% of the total market value, while the lowest valued one-third accounts for 12.8% of market value. Talk about a wealth gap – the top tier of homes is worth nearly five times more than the bottom tier.

More than one-fifth (21.3%) of the nation’s housing value is located in California. The state’s housing stock gained $1.4 trillion in 2021 and is now worth $9.2 trillion. That is more than the combined value of the bottom 30 states.

The housing market surpassed the $1 trillion milestone in four states in 2021, including Colorado (now worth $1.2 trillion), North Carolina ($1.1 trillion), Georgia ($1 trillion) and Arizona ($1 trillion). There are now 14 states with more than $1 trillion in housing value. 

Florida, Texas, and Colorado win the award for most improved, gaining the most ground in 2021 compared to the rest of the country. Florida’s housing market grew from 6% to 6.4% year-over-year, while Texas' share grew from 5.9% to 6.1%, and Colorado's share grew from 2.6% to 2.8%.

New York lost more market share than any other state, falling from 7.8% to 7.3%, but climbed a total value of $2.8 trillion to $3.2 trillion year-over-year.

The Los Angeles area gained more value than any other metro in 2021, although it couldn’t beat New York for the title of nation’s largest housing market, worth $3.5 trillion. Los Angeles ($3.3 trillion), San Francisco ($2 trillion), Boston ($1.1 trillion) and Washington, D.C. ($1.1 trillion) round out the top five.