From San Francisco to West Palm Beach: US home prices hitting record highs, here's why

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The median price of a home in the United States climbed to a record $408,776 in June, highlighting a housing market increasingly dominated by affluent buyers while making homeownership more difficult for many Americans.According to new data from Redfin, the median sale price rose 2.2% year-on-year, reaching the highest level ever recorded in the country.The record prices come as wealthy buyers continue to fuel demand in the premium housing segment, relying on stock market gains, bonuses and cash purchases instead of mortgages. As a result, many first-time and middle-income buyers are finding themselves priced out of the market.The divide is particularly evident in the Hamptons, where the average home price has surged to $4.5 million, up 34% from a year ago, according to a review by appraiser Jonathan Miller. It is the second consecutive year that the area's average home price has remained above the $4 million mark.The luxury market has also been supported by record Wall Street payouts. The average Wall Street bonus reached nearly $247,000 per employee last year as bank profits rose by more than 30%, enabling many buyers to purchase homes outright using bonuses and investment gains rather than home loans, the New York Post reported.

Miller's report found that homes priced above $5 million accounted for the largest share of sales on record during the last quarter. The report also noted an increase in bidding wars and shorter selling times, suggesting that demand is being driven by committed high-end buyers rather than speculative investors.Outside New York, San Francisco and West Palm Beach recorded the strongest home price growth among major US metro areas.Home prices in San Francisco jumped 9.2%, the highest increase in the country, as wealth generated by the artificial intelligence boom flowed into the housing market.Meanwhile, West Palm Beach saw prices rise 8.6%, driven by continued demand from billionaires, business executives and other wealthy Americans relocating to South Florida for its warm climate and tax advantages.Home sales in both cities increased by around 23% compared with a year earlier, marking the largest sales gains among the metropolitan areas tracked by Redfin.

For average buyers, however, affordability remains a major challenge.More than one in five homes sold nationwide in June fetched a price above the original asking price, the highest share in over a year. On Long Island, the market was even more competitive, with more than half of all homes selling above the asking price during the last quarter.