Austin housing market surges by roughly the value of Ecuador’s GDP

The total value of homes in Austin swelled by nearly 40 percent year over year in 2021 – double that of the total U.S. market which grew less than 20 percent.

The gain in market value of $103 billion – roughly equal to the 2020 gross domestic product of Ecuador – represents the biggest gain among the 100 most populous U.S. metropolitan areas, according to a Redfin report. It’s based on the Redfin Housing Value Index, which calculates the overall value of U.S. homes rather than home prices.

The value of Austin’s housing market is now a whopping $365.9 billion.

Austin recently lost its spot in Redfin’s Top 10 migration destinations, as many house hunters have found themselves priced out.

California and New York transplants, who were initially attracted to the Texas capital for its affordability, tend to pay more than locals. The typical home purchased by out-of-towners in Austin sells for $470,000, versus $447,500 for locals, according to a July Redfin report.

Home prices, particularly in Texas, have skyrocketed since the early days of the pandemic as low mortgage rates, remote work and a soaring stock market have driven homebuyer demand alongside a novel housing shortage.

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“The surge in housing values during the pandemic has widened the gap between homeowners and renters in America,’’ said Redfin Chief Economist Daryl Fairweather. “Homeowners have seen their wealth increase significantly over the past year, while renters have missed out on those gains and are now grappling with rent inflation.”

Overall, the value of U.S. homes surged by 18.6 percent over the past year to a record $38.6 trillion in December 2021 from $32.6 trillion in December 2020.

“The silver lining is that housing values didn’t just climb in large affluent cities,’’ said Fairweather. “Homeowners in rural America, who don’t normally see substantial home-value increases, also reaped the benefits of a booming housing market. ”

The total value of rural and suburban homes rose roughly 20 percent year over year to $4.2 trillion and $22.2 trillion, respectively at the end of 2021.

Dallas-Fort Worth and Houston rank third and fourth, respectively, in build-to-rent communities, according to a new report from rental platform RentCafé.

Millennials, who have been largely locked out of the housing market, accounted for more than half of mortgage applications last year. The overall value of homes owned by millennials ballooned 34.3% year over year to $4.6 trillion in the third quarter of 2021.