Yahoo Finance The Ultra Wealthy Own Nearly 4 Homes on Average: How This Impacts the US Housing Market
Homes have become more expensive than ever since the onset of the COVID-19 pandemic. In fact, home prices are expected to increase in 2024, according to CNBC. Homes aren’t being built fast enough to keep up with demand, which may lead to a 2.6% increase in home prices this year.
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However, despite the high cost of homes, there’s one category of people that holds almost one-third of their wealth in primary and secondary homes: ultra-high-net-worth individuals.
What Is An Ultra-High-Net-Worth Individual?
An ultra-high-net-worth individual (UHNWI) is a person with a net worth over $30M, which includes the value of their primary residence. The ultra wealthy allocate their money across a variety of assets, with one major category being primary and secondary homes.
As home prices continue to rise, UHNWIs will continue to see their net worth increase even further.
How Much Do The Ultra Wealthy Invest in Homes?
According to the Visual Capitalist, the ultra wealthy invest 32% of their average proportion of total wealth in primary and secondary homes which is the largest share among other assets, followed by equities (18%) and commercial property (14%). That’s 3.7 homes per UHNWI, on average.
It’s reported that in 2022, there were roughly 579,000 people worldwide with wealth that exceeded $30 million. New York, Tokyo and San Francisco are home to the most ultra wealthy individuals worldwide. Over the next five years, this number is projected to reach 744,000, which represents a stunning 29% increase.
How The UHNWI Impacts The U.S. Housing Market
As the wealth of the UHNWI continues to increase, so too will the demand for real estate. The reality is that in a housing market with low supply, whoever can make the highest offer will get the property.
With an increasing number of people reaching UHNWI status, home prices may rise further especially if mortgage rates remain high and the supply of homes continues to stagnate.
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This article originally appeared on GOBankingRates.com: The Ultra Wealthy Own Nearly 4 Homes on Average: How This Impacts the US Housing Market
