Luxury U.S. home prices are rising more than three times faster than prices for non-luxury homes, a new report suggests, underscoring a widening divide between the high-end and entry-level housing markets.
The median U.S. luxury home sale price rose 4.7 percent year over year to $1.37 million during the three months ending May 31, according to an analysis published Tuesday by real estate brokerage Redfin. That was more than triple the 1.5 percent gain in non-luxury home prices.
Redfin attributed the faster price growth to rising demand for high-end properties. Pending sales of luxury homes rose 5.2 percent from a year earlier, the largest increase since December 2024. By comparison, pending sales of non-luxury homes rose 3.6 percent.
The findings highlighted a growing split in how affluent and less-affluent Americans are navigating high housing costs and economic uncertainty. Many buyers continue to face pressure from elevated mortgage rates and home prices. Inflation concerns and uncertainty over the Federal Reserve’s next move on interest rates have also made some prospective buyers more cautious about taking on a major purchase.
Ultra-wealthy Americans, by contrast, have continued to buy as the broader housing market slows. Redfin said affluent buyers are better positioned to absorb high housing costs and are often less dependent on mortgage financing.
The findings echo those from real estate insurer First American, which also pointed to a widening divide between higher-end and entry-level housing in its latest home-price report.
First American, which tracks price changes for the same properties over time using more than 46 million paired transactions, said luxury homes have generally held up better than starter and mid-tier properties. The firm attributed that resilience to years of home-price appreciation and stock market gains, which have strengthened the purchasing power of higher-income buyers.
Those buyers have also been better positioned than first-time purchasers to absorb elevated borrowing costs, First American said.
Florida Leads Luxury Price Growth
Tampa and Miami led the nation in luxury home-price growth, according to Redfin.
Luxury home prices in Tampa rose 15.6 percent year over year, the largest increase among the 50 most populous metro areas in the United States. Miami followed with a 14.2 percent gain.
The gains came even as the broader housing market softened in both metros. Non-luxury prices fell 0.5 percent in Tampa and 0.7 percent in Miami.
Redfin said luxury prices are rising in coastal Florida because affluent buyers continue to purchase high-end homes in the Sunshine State, which regularly dominates the company’s list of the most expensive U.S. home sales.
Miami and West Palm Beach, in particular, have become magnets for ultra-wealthy buyers, according to Redfin. Meta CEO Mark Zuckerberg recently paid $170 million for an estate on Miami’s Indian Creek Island, a 300-acre man-made strip of land dubbed the “billionaire bunker.”
Florida also ranked among the strongest markets for pending sales of luxury homes. Three of the 10 metros with the largest gains in pending luxury sales were in the state: Tampa (20.8 percent), West Palm Beach (18.5 percent), and Miami (14.6 percent).
San Francisco, Nashville, and San Diego were the only metros where pending luxury sales rose faster than in Florida. Those sales in San Francisco rose 45.9 percent year over year, by far the largest increase among the metros in Redfin’s analysis. Nashville followed with a 24.5 percent increase, while San Diego posted a 22.5 percent gain.
The Bay Area’s luxury market is gaining momentum largely because of the artificial intelligence boom, with tech workers putting salaries, bonuses, and stock-market gains into real estate. Nashville has continued to attract wealthy residents drawn by jobs and Tennessee’s favorable tax environment. San Diego, meanwhile, is capturing some spillover demand from Los Angeles.
