Writer: Mirella Franzese
December 2025 — Surging home prices across the U.S. are widening the American wealth gap. In cities like Miami and Boston, where the average cost of a home exceeds income growth, the ultra-wealthy continue to drive demand for high-end properties while affordability remains elusive for lower- and middle-class families. This shift within the broader housing market continues to shape buyer and seller dynamics.
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The average cost of buying a home remains elevated across multiple Southern markets — particularly North Carolina, Georgia, Florida and Tennessee — which have all seen sharp home price growth over the last five years. This rise in home prices has outpaced local incomes in several of the country’s largest cities, including Miami, Austin, Fort Worth, Philadelphia and Boston.
Priced out
While U.S. household incomes have nearly doubled since 2000 — rising from $41,990 to $80,610 in 2025 — median home prices have grown almost threefold, reaching an average of $339,937, according to data from the U.S. Census Bureau and Zillow compiled by Construction Coverage.
This trend has deepened wealth disparities across the country, said Marshall Crawford, president and CEO of Nashville’s affordable housing organization The Housing Fund.
“Homeownership is deeply tied to income levels. When we discuss affordability, whether renting or buying, it all comes down to wages,” Crawford told Invest:. “Rising home prices have outpaced wage growth, making homeownership increasingly difficult.”
Concentrated wealth
The distribution of wealth in the U.S. remains highly unequal — a reality reflected across the housing market. The top 0.1% of U.S. households control $23.56 trillion in assets, 8.4% of which is directly tied to real estate, according to 2Q25 data from the Federal Reserve’s distribution of wealth analysis. By comparison, the bottom 50% holds just $4.21 trillion, with real estate accounting for nearly half (47.8%) of their total wealth. The middle 50–90% range manages $50.27 trillion in assets, just under 40% of which is linked to real estate.
Historically, America’s bottom 50% has held a larger share of its wealth in real estate because homes and consumer durable goods — such as vehicles and electronics — make up its most significant assets. Meanwhile, the top 0.1% primarily invests in liquid financial assets like bonds, equities and private businesses.
Despite real estate’s historic role in wealth creation for the middle and lower classes, the current market continues to shut out many buyers. According to a 2025 Redfin report, America’s richest 1% could buy nearly the entire housing market. The wealthiest 0.1% alone have enough buying power to purchase every residential property in the country’s 25 most populous metros.
“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,” said Chen Zhao, lead researcher at Redfin Economics, in the report.
The rapid accumulation of wealth at the top has been fueled in part by the sharp rise in home values, which has simultaneously priced out lower- and middle-income buyers. In the past few years alone, the wealth of the top 0.1% has grown by 24.9% ($4.4 trillion) — more than the total net worth of the entire bottom 50% of households, according to Mortgage Mag.
Luxury market dynamics
In South Florida, for instance, there is a greater supply of luxury condos than affordable and mid-range single-family homes. According to Brett Atkinson, president of the South Florida business unit at Moss — one of the largest general contractors in the U.S. Southeast — the for-sale condo sector currently represents about 50–60% of their work.
“The market has shifted toward high-end luxury, largely due to the influx of wealth into the area,” Atkinson told Invest:. “Condominiums are getting larger, more luxurious and significantly more expensive.”
Data from Miami Realtors shows that Miami’s condo inventory increased from 9,775 listings in July 2024 to 12,838 in July 2025 — a 31% jump. Meanwhile, single-family home inventory, typically owned by middle and upper-middle-class buyers, saw an even sharper increase of 38.89% year-over-year. Yet the number of active listings (5,539) remained nearly half that of condos.
Nationally, luxury homes are selling faster than non-luxury properties. Data from National Mortgage Professional shows luxury home sales grew 2.9% year-over-year, compared with 0.7% for non-luxury homes. In fact, sales of luxury homes priced at $10 million or more in South Florida reached a second all-time high this year, according to July 2025 statistics from the MIAMI Association of Realtors (MIAMI) and the MIAMI Southeast Florida Multiple Listing Service (SEFMLS).
This illustrates how ultra-wealthy buyers are behaving differently from typical move-up or first-time buyers, who remain hesitant given current affordability constraints.
“The luxury market has been a little more protected over the past year,” said Jonathan Buch, a Redfin agent in West Palm Beach. “Affordability challenges have made it more difficult to sell homes priced under $800,000, but high-end properties are still moving.”
Want more? Read the Invest: reports.
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