Meanwhile, lower-income buyers face mounting mortgage debt
The gap between the ultra-wealthy and the rest of the US population continues to widen, and nowhere is that more evident than in real estate.
A new report from Redfin reveals that the top 1% of wealthiest Americans now hold a combined $49.2 trillion in net worth, nearly enough to purchase every residential property in the country, valued at $49.7 trillion as of the end of 2024.
“This group is able to watch their real estate assets appreciate without facing mortgage interest payments, as they mainly buy homes with cash,” said Chen Zhao, lead researcher at Redfin Economics. “It is a striking example of the concentration of wealth in America that the top 1% could hypothetically afford to buy every home in the country - without going into debt - while millions of households struggle to buy or hold on to just one.”
She added that the rise in home values has significantly contributed to the rapid accumulation of wealth at the top. Unlike average homebuyers, wealthy individuals often pay in cash, avoiding the burden of mortgage interest while watching their real estate assets appreciate.
The 1%’s real estate portfolio
The wealthiest 1%, defined by the Federal Reserve as households with a minimum net worth of $11.2 million, includes roughly 1.3 million households. While their wealth is primarily tied up in financial assets, real estate still makes up 12.3% of their portfolio, equivalent to $6.1 trillion in property holdings.
By comparison, the bottom 50% of US households have a combined net worth of just $3.9 trillion, with 46.4% of that tied to real estate assets. However, those at the bottom are significantly more burdened by mortgage debt.
The bottom 50% own $4.9 trillion in real estate but hold $3.1 trillion in mortgage debt. The top 1% own $6.5 trillion in real estate, with only $411.5 billion in mortgage debt.
This disparity highlights how homeownership is a financial anchor for middle- and lower-income households, while the ultra-wealthy use it as just one component of a much larger investment portfolio.
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Even among the ultra-rich, an even smaller elite holds an extraordinary share of wealth. This group includes 134,000 households, each with a net worth of at least $46.3 million. Their total net worth is $22.1 trillion, enough to buy every home in the 25 largest metro areas.
In just the past two years, the wealth of this top 0.1% has grown by $4.4 trillion (24.9%), which is more than the total net worth of the entire bottom 50% of households.
For perspective, that $4.4 trillion increase alone is enough to buy every home in Chicago, Atlanta, Boston, and Houston combined.
Meanwhile, the bottom 50% saw their net worth grow by just 8.5% ($306.3 billion) in the same period, showing how the wealth gap is accelerating rather than narrowing.
Luxury rentals on the rise
A separate Redfin report found that wealthy Americans are increasingly choosing to rent instead of buy, particularly in major metropolitan areas where property prices have soared.
The report found that wealthy renters now make up a larger share of the rental market in 35 of the 50 largest metro areas. The biggest jumps were in:
- Raleigh, NC: 7.7% of renters are wealthy (up from 4.8% in 2019)
- Orlando, Fla: 10.8% (up from 8.5%)
- Buffalo, NY: 6.6% (up from 4.6%)
- Tampa, Fla: 9.4% (up from 7.9%)
- San Diego, Calif: 9.3% (up from 8%)
According to Redfin senior economist Elijah de la Campa, many affluent Americans are opting to lease rather than take on a mortgage because renting allows them to free up cash for other investments that may offer better returns than real estate.
“With mortgage rates near 7%, renting frees up cash for other investments that may be more lucrative than real estate,” de la Campa said.
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