The combined, total value of every home in the United States is expected to climb to a record high of more than $29.6 trillion in 2016, up 5.7 percent from a year ago. And the total amount collected by landlords from the nation’s renters in 2016, while dwarfed by the value of owned homes nationwide, is also growing and nothing to sneeze at.
The combined, total value of every home in the United States is expected to climb to a record high of more than $29.6 trillion in 2016, up 5.7 percent from a year ago. And the total amount collected by landlords from the nation’s renters in 2016, while dwarfed by the value of owned homes nationwide, is also growing and nothing to sneeze at.
But let’s start with that $29.6 trillion figure, a positively gargantuan sum that is probably pretty difficult for most of us to really comprehend. Still, we can at least try to put it into some kind of context.
Bill Gates is America’s wealthiest citizen, with a total net worth of roughly $84 billion (a massive sum notable for many reasons, not the least of which is the fact that it would be a lot higher had he not decided to give much of it away). With that kind of cash, he could afford to give all 7.4 billion citizens of earth a crisp $10 bill, and still have several billion dollars left over. And while Gates is the wealthiest American, he’s not the only mega-rich person in the country. In 2016, the combined net worth of the 50 richest Americans was about $1.2 trillion (give or take a few hundred million dollars in pocket change) – roughly equal to the 2016 budget of the United Kingdom. It’s enough to buy an entire private air wing of roughly 3,000 brand new Boeing 747-8s (with some cash left over).
Still, that’s enough to buy only a fraction of all homes in the country. It would take Gates and another roughly 399 equally wealthy citizens pooling their resources together to be able to afford to buy every home in the United States.
So it’s safe to say the United States housing market is pretty darn valuable – worth more than the entire 2015 market capitalization of every U.S. public company combined (roughly $25 trillion). It’s even worth more than the combined GDPs of the United States and China (at least as measured by the World Bank and United Nations), by far the world’s largest two individual economies.
But, as we’ve said before (and will undoubtedly say again), the national housing market is really just a collection of smaller, local markets. And on their own, the total value of housing in some of America’s priciest places is eye-popping.
Homes in the glitzy Los Angeles metro, America’s most valuable housing market and home to ultra-wealthy enclaves including Beverly Hills and Malibu, have a combined total value of more than $2.5 trillion – more than double the combined wealth of America’s 50 richest citizens. Next on the list, the total value of the New York metro’s housing stock comes in at slightly less than $2.4 trillion – more or less the GDP of France (only the world’s fifth-largest national economy). Rounding out the top three is the five-county San Francisco Bay Area, with a combined housing value of almost $1.3 trillion – a shade less than the total amount expected to be spent on the F-35 fighter jet program when all is said and done.
Combined, homes in the ten most-valuable U.S. metro housing markets (the three noted above, plus – in descending order – Washington D.C., Miami, Chicago, Boston, San Jose, San Diego and Philadelphia) are worth more than $11.2 trillion, or a little more than a third of the national sum. A total of 536 individual metro markets were included in this analysis, and the numbers attached to all are pretty impressive. At $391 million and change, homes in the Raymondville, Texas, metro had the lowest combined value – a sum that nevertheless bests the $325 million contract awarded to Miami Marlins outfielder Giancarlo Stanton, to date the largest individual contract ever signed in Major League Baseball history.
But what about the more than one-third of American households that rent their homes? Rather than owning an asset with a tangible value, these households pay to live in a home owned by someone else. But how much do they pay? According to Zillow’s analysis, Americans paid $479 billion in rent in 2016, $18 billion more than they paid in 2015 and $97 billion more than 2011 at the depths of the housing recession.
To put this number in context, the total amount of rent Americans paid in 2016 is similar in size to the total economic output of Belgium, and slightly less than the $598 billion that the United States spent on its military in 2015. It is larger than the market capitalization of all but three U.S. public companies – Apple, Alphabet and Microsoft. The nine wealthiest Americans – which includes Bill Gates, Jeff Bezos, Warren Buffett, Mark Zuckerberg, Larry Ellison, Michael Bloomberg, Charles Koch, David Koch, and Larry Page according to the Forbes 500 — could pay every American’s rent for a single year with their combined net worth.
New Yorkers paid $54.6 billion in rent in 2016, 11.4 percent of all rent paid in the country and $2.4 billion more than they paid in 2015. Los Angeles and San Francisco were the second- and third-largest rental markets, with Angelenos spending $38.6 billion and San Franciscans spending $15.8 billion on rent in 2016. Other markets where renters spent upward of $10 billion in 2016 include Chicago ($14.9 billion), Washington ($14.4 billion), Miami-Fort Lauderdale ($12.3 billion), Dallas-Fort Worth ($11.1 billion), Houston ($10.5 billion) and Boston ($10.3 billion). Phoenix renters spent $7.1 billion on rent in 2016, shy of the state of Arizona’s total budget of $9.6 billion.
Among the 50 largest US housing markets, Birmingham ($974 million), Buffalo ($1.3 billion), Salt Lake City ($1.3 billion) and Louisville ($1.3 billion) renters spent the least on rent in 2016 – less than a single month’s worth of rent paid in New York, Los Angeles and San Francisco.
While these numbers are orders of magnitude smaller than the total value of the American housing stock, it is important to remember that rent paid is a flow, measured over a set period of time (in this case, one year). The total value is a stock figure, measured at a specific point, and one that has in the case of many homes accumulated over several years. Additionally, a smaller portion of the American housing stock is rented, with the majority of homes being owner-occupied.
