Luxury home values in the U.S. are outpacing typical home value growth for the first time in years, according to a new Zillow report. This trend has persisted for five consecutive months, with luxury homes appreciating 3.9% annually compared to 3.2% for typical homes.

Factors contributing to this shift include lower sensitivity to mortgage rates among luxury buyers, slower inventory recovery in the luxury segment, and strong growth in certain markets like Richmond, Virginia. However, the share of luxury listings with price cuts is increasing, albeit at a lower rate than the overall market.

"Luxury homes can be challenging to sell because the pool of buyers is so much smaller. That's one reason prices for them usually grow more slowly," said Anushna Prakash, economic research scientist at Zillow. "We're seeing a different trend play out this year. Luxury home buyers are likely less affected by higher mortgage rates than a typical buyer, especially repeat buyers who saw their home equity soar over recent years. Many will be able to pay with cash and skip a mortgage payment altogether." 

Source: Edisource International Newsdesk with AI Smart Assist