While the national housing market continues to struggle with affordability constraints and elevated mortgage rates, the luxury segment is booming, and projected to reach a total value of more than $338 billion by 2030.
The domestic residential real estate market is currently valued at roughly $289 billion, but over the next five years, it is expected to grow by nearly 3.2%, driven by buyers flush with cash and a massive intergenerational wealth transfer, according to a new report from Mordor Intelligence.
The India-based market research firm found that while the West led in high-end real estate transactions last year, accounting for a third of market revenue, the next five years will see the ascent of the Southeast.
The region is expected to post the fastest growth at a rate of 3.32% by 2030, led by Florida, Georgia, and the Carolinas—states offering a winning combination of low-income-tax policies, year-round warm weather, and luxury lifestyle amenities.
Realtor.com® senior economist Anthony Smith says Mordor’s growth projection is reasonable, given the long-term trends affecting the luxury sector.
“Following a surge in demand and pricing during the pandemic period, the share of million-dollar-plus listings rose sharply beginning in 2020 and continued to climb into early 2022,” he says. “Since then, growth has moderated, suggesting the next five years will likely reflect a steadier, more sustainable expansion rather than the outsized gains seen earlier in the decade.”
According to the data analysis, the key factors fueling growth in the high-end housing market include the limited supply of exclusive properties in trophy ZIP codes, surging demand for sustainable and climate-resilient homes, and an ongoing transfer of wealth estimated in the tens of trillions of dollars from baby boomers to younger buyers.
Wealthy buyers turn to cash
Market volatility in 2024 prompted many high-net-worth individuals to take their money out of the stock market and invest it in real estate instead.
As the Mordor report notes, “Cash deals remove financing contingencies, close faster, and sidestep jumbo-loan underwriting hurdles, enabling stronger offers in bidding wars.”
Simply put, cash buyers are typically able to come to the closing table faster because they do not need to secure financing, which is highly appealing to motivated sellers.
Those multimillion-dollar cash purchases of luxury homes, according to Mordor, continue to anchor demand, insulating the market from fluctuations in mortgage rates.
According to Realtor.com data, roughly one-third of all U.S. home sales in the first half of 2025 were paid in all cash, and the prevalence rises sharply with price.
About half of homes priced between $2 million and $5 million, and over 65% of properties priced between $5 million and $10 million were cash transactions so far this year.
“This elevated cash activity signals both liquidity and strategic positioning among high-wealth buyers,” says Smith. “Many affluent purchasers opt to buy in cash to avoid borrowing costs, navigate competitive bidding with greater certainty, or allocate portfolio leverage elsewhere.”
Perhaps unsurprisingly, popular Sunbelt metros with robust luxury housing sectors like Miami and Austin, TX, have seen an influx of affluent all-cash buyers coming in to snap up coveted properties.
Smith says that these areas attract cash-rich buyers from higher-cost regions seeking both lifestyle and value advantages. The combination of lower taxes, expanding high-income migration, and the ability to purchase outright in fast-growing metros like Miami and Raleigh, NC, underscores how cash liquidity continues to fuel demand and pricing resilience at the upper end of the market.
“There is a huge divide in performance between the luxury market and the rest of the market,” Ana Bozovic, a Miami-based real estate agent and founder of Analytics Miami, tells Realtor.com. “The higher up we go in price or price per square foot, the more all cash our market is.”
The ‘Great Wealth Transfer’ accelerates
The UBS Global Wealth Report 2024 estimated that Americans who have more than $1 million in investable assets—the majority of them skewing older—control $83.5 trillion in total combined wealth, which they will be passing on to their children and grandchildren.
According to Mordor’s analysis, this large-scale handover of capital is unlocking new sets of buyers: typically heirs in the 40s with their sights set on homeownership and plenty of money to spend.
“Recipients gravitate toward trophy homes that blend technology, sustainability, and lifestyle amenities,” states the report. “The resulting infusion of liquid capital strengthens the United States’ luxury residential real estate market through at least the next decade.”
Smith agrees, noting that as significant assets change hands over the coming decade, many wealthy households prioritize real estate as both a store of value and a lifestyle investment.
States with advantageous estate planning frameworks, such as Wyoming and Florida, continue to attract high-net-worth individuals seeking to preserve and efficiently transfer wealth.
Bozovic stresses that for owners of ultra-expensive properties, it is about security, diversification, and lifestyle alignment, as well as an insurance policy for the future.
“Luxury real estate is in many ways the equivalent of a family trust: It is where wealth lives,” she says.
Low supply, high demand
Inventory of for-sale homes in elite ZIP codes have tightened due to the “lock-in effect” that set in after owners were able to secure mortgage rates below 4% at the height of the pandemic.
The scarcity of luxury listings has pushed up prices and diverted demand toward new high-end developments boasting top-of-the-line modern features, such as built-in smart-home technology, filtered-air systems, and touch-free controls.
In this environment, sellers who do enter the market can expect swift closings, particularly for climate-hardened and upgraded properties, according to the report.
From luxury condos to spacious villas
In 2024, apartments and condominiums made up 58% of luxury real estate spending, reinforcing the role of these properties as the “backbone” of the high-end housing market, the report states.
Tower living offers buyers proximity to entertainment venues, concierge services, and hassle-free maintenance, complete with premium finishes and wellness amenities.
But the demand for villas and landed homes is now surging, with a projected growth rate of 3.29% through 2030.
These sprawling estates offer privacy, spacious grounds large enough for pickleball courts and car barns, and work-from-home studios.
“This interplay between vertical convenience and horizontal space will continue to shape the United States luxury residential real estate market in the years ahead,” predict the report’s authors.
Most coveted metros
The West dominated the luxury market last year, led by Los Angeles and the Bay Area’s Silicon Valley, where strict zoning laws and tight inventory put upward pressure on prices.
However, according to the Mordor research, the future belongs to the Southeast, as demand for luxury condos in Miami and coveted waterfront estates in Kiwaha Island, SC, is soaring despite the persistent threat of hurricanes.
“South Florida has become a destination for increasingly mobile wealth and talent, both domestic and international,” says Bozovic. “The prime segments of our real estate market have seen meteoric and sustained growth.”
At the same time, traditional wealth hubs like Manhattan, NY, and Greenwich, CT, continue to fuel demand thanks to the proximity to world-class cultural institutions and financial services those markets offer high-net-worth buyers.
“We are now in the early days of a tremendous shift in economic focus, away from these 20th century capitals that also have higher taxes and in many ways, lower quality of life,” predicts Bozovic.