U.S. housing gained a record $6.9 trillion in 2021, nearly doubling what was previously the largest annual gain of $3.7 trillion in 2005. The full U.S. housing stock is now worth $43.4 trillion, according to a new Zillow analysis.
Strong demand met limited supply in 2021, driving home values up more than ever before — home values grew 19.6% last year, an all-time high in Zillow's data, which dates back more than 20 years. That remarkable rise means U.S. housing is now worth twice what it was a decade ago, in the midst of the Great Recession. Zillow economists expect 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."
Nationally, the top one-third of highest-valued homes make up 60.8% of the total market value, while the lowest-valued one-third accounts for 12.8%. Put another way, 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 in California. The state's housing stock gained $1.4 trillion in 2021 and is now worth a total of $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 last year: 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 gained the most ground relative to the rest of the country in 2021. Florida's share of the housing market grew from 6% in 2020 to 6.4% in 2021, 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% of the U.S. market in 2020 to 7.3% last year while climbing from a total value of $2.8 trillion to $3.2 trillion.
Los Angeles–area homes gained more value than any other metro in 2021, but the New York metro area remains the 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.
The number of homes in a metro has, of course, the biggest influence on how much the value of the total housing stock increases, but there are a few notable markets that outperformed their size. Phoenix, for example, gained $171 billion in housing value last year, more than the entire state of Pennsylvania gained. Austin's housing market gained more than nearby Houston's despite having less than one-third of the number of homes.