Million-dollar homes are the fastest-moving part of the housing market as wealth gap grows

The brightest part of the moribund US housing market is the country’s most expensive homes.

Although home sales in August mostly underwhelmed, dropping 0.2% from July and increasing a modest 1.8% from a year earlier, sales at $1 million or above were up 8.4% from a year ago, according to National Association of Realtors data.

High-priced homes generally move swiftly: The median home selling for at least $1 million in August spent 27 days on the market, just three days longer than homes in the $250,000 to $500,000 range — the price point that makes up the bulk of the nation’s sales.

Learn more: This map shows the median home price by state

The success of higher-end properties is yet another reflection of the country’s growing wealth gap. Economic uncertainty and high mortgage rates are keeping many buyers, especially first-timers, out of the market. But buyers with big budgets generally feel secure in their jobs and are more likely to have stock market investments that have grown during the latest bull run. Others are move-up buyers who have high equity positions in their current homes, helping them lessen the pain of high interest rates by buying with cash or sizable down payments.

“The upper-end market is doing well,” Lawrence Yun, chief economist at the National Association of Realtors, said last month. “It’s a combination of stock market wealth and housing wealth for the trade-up buyers.”

Housing markets vary greatly throughout the country, and while it takes a healthy income to afford a $1 million home — at least $250,000 using conventional affordability metrics and current mortgage rates — that price point isn’t always particularly high-end. In very high-cost areas, like San Jose, Calif., a $1 million home can even be below local median prices. Realtor.com defines “entry-level luxury” in 2025 as homes selling for $1.3 million or above — the top 10% of the market nationwide.

“Everything is very inflated,” Timpson said. “Something that’s not even upgraded is going for over $500,000. To me, that’s not a good investment.”

The income Timpson brings in from her successful government contracting business helped them get comfortable with spending more on a turnkey home, as did qualifying for a VA loan with favorable terms. The equity they have in their first home was another cushion: After buying it for $200,000 four years ago, it’s now worth around $360,000.

For $1 million, they’re getting a five-bedroom, nearly 4,000 square-foot, newly built home on almost two acres with a fenced-in yard and upgraded appliances — specs she thinks will be worth the extra up-front expense.

“It’s absolutely gorgeous,” Timpson said. “Being at a higher price point makes sense for new construction homes.”

Read more: Here’s the salary you need to afford a $1 million home

Far from the pricey East Coast, in Las Vegas, luxury homes have been moving quickly, said Bryan Lebo, a real estate agent and owner of the Lebo Group, which focuses on high-end properties. Through August, nearly 1,300 homes over $1 million have been sold in the region, on track to outpace 2024 when a record 1,776 houses were sold at that price point.

Lebo, who has lived in Las Vegas for more than three decades, thinks nationwide wealth distribution trends can explain some of that growth. More locally, he said, the city’s rapid development, including a growing arts and food scene away from the Strip and new professional sports teams, is helping attract more well-heeled buyers. Its status as a tax haven doesn’t hurt either: He regularly works with relocators, many of whom are coming from California and own businesses or have jobs that can be done remotely.

“So much has changed in the last five years to make Las Vegas a more desirable destination for wealthy individuals,” Lebo said.

For most of his career, he would prepare sellers of $3 million homes for a yearlong sales process, owing to the limited buyer pool. But that’s changed.

“Now, a $3 million home is not much of a big deal — it’s a relatively pedestrian price point,” Lebo said.

Nationwide, and at all price points, inventory has surged this year. That’s given buyers more options to choose from and, in some cases, more room to negotiate with sellers.

Learn more: Is now a good time to buy a house?

Despite the inventory jump, prices are still holding strong on the high end of the market. As of mid-2025, luxury single-family home prices were up 1.8% from a year earlier, and sales rose 1.7%, according to a report from Coldwell Banker Global Luxury.

In Scottsdale, Ariz., luxury homes typically start around $2 million. They aren’t moving quite as quickly as they did a year ago, but in an environment where most buyers at that price point can pay in cash and have few spending worries, the power still tilts toward sellers, said Daniel Lombard, a luxury real estate adviser with Russ Lyon Sotheby’s International Realty.

“I’d argue that it’s still a sellers’ market for the most part,” Lombard said. “I think at the higher price point, they’re feeling a little bit more immune to [economic uncertainty] at the moment.”

Jason Waugh, president of Coldwell Banker Affiliates, sees no signs of a slowdown later this year or into 2026.

“We believe that it’s going to perform very, very strongly,” Waugh said.

The way he views it, the housing market as a whole is due to tick up again after several years of flat or declining sales. And in those conditions, higher-priced homes are usually the first to benefit.

“Luxury always leads the way,” he said.

Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.

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