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There was a time when $1 million homes were only found in the most expensive enclaves of America's major cities, but an increasing number of American cities are seeing a rapid rise in the number of homes worth over $1 million. A LendingTree report from November 2024 shows that 10.57% of owner-occupied houses in America's 50 major metropolitan areas were worth more than $1 million in 2023.

That's an increase of 2.86% over 2022's 7.71%. It's 1.32 million homes in raw numbers, which makes for an average of 26,400 in each of America's 50 biggest metro areas. However, the study, which Lending Tree compiled using U.S. Census Data, showed that the distribution of $1 million homes is far from even. Seven out of 10 of them are on America's Pacific or Atlantic Coasts.

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The 10 American metropolitan areas with the highest percentage of owner-occupied homes valued over $1 million are:

• San Jose, California – 71.57%
• San Francisco – 56.57%
• Los Angeles – 36.42%
• San Diego – 34.83%
• Seattle – 25.96%
• Boston – 17.22%
• New York – 16.17%
• Washington, D.C.- 14.04%
• Denver – 12.40%
• Miami – 11.43%

 The top four cities on the list all being from California illustrates the gravity of the Golden State's housing affordability crisis. When averaged together, 44.02% of the owner-occupied homes in California's largest metro areas are worth more than $1 million.  Lending Tree's data also showed that Sacramento (9.44%) and Riverside (6.22%) are in the top 20. They used to be cities Californians flocked to because of low housing prices.

The irony is that California's once ample housing supply drew millions of Americans to its biggest metropolitan areas for much of the 20th century. To be certain, millions of people still move to California seeking high-salaried positions in tech and entertainment hubs like San Francisco and Los Angeles. Unfortunately, they are finding it exponentially more difficult to navigate California's housing landscape than their predecessors.

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LendingTree, and many experts who observe America's housing market, agree that the surge in home values is largely due to a lack of availability. Many of the metropolitan areas on Lending Tree's top 10 list underwent rapid expansion throughout the 20th century. Today, the vacant land necessary to build new single-family home communities is in short supply and many local zoning laws prevent the construction of multi-family developments.

That scarcity puts a high price premium on the available housing supply and that also spills over into occupied homes. Every time a property in any neighborhood sells for a higher price, comparable homes in the area get a bump in value. On the reverse side of the equation, the people occupying homes worth over $1 million  have very little incentive to sell.

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After all, who wants to sell their house for $1 million and find themselves priced out of their neighborhood? The prospect of paying an APR near 7% isn't appealing either. So, the homeowners stay put while their property appreciates.  The equity they get during this process is also an effective hedge against inflation in many cases.  This is why homeowners are locked in the housing market while prospective buyers increasingly find themselves locked out.

 If there is any good news, it's that America still has plenty of metropolitan areas where median home values are well below $1 million LendingTree's study showed that Cleveland (1.09%), Buffalo, New York (1.16%), and Louisville, Kentucky (1.44%) are the top three metropolitan areas with the smallest concentration of owner-occupied homes with median values over $1 million.

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This article These 10 U.S. Cities Have The Most $1M Homes originally appeared on Benzinga.com