Luxury market keeps outperforming the broader market

Stay on target

As an agent, there's never a shortage of things competing for your attention. Honestly, it never stops, and if you're not careful, it can pull you away from the work that actually grows your business.

No matter what happens, make sure you always do the work that drives your business forward. 

But how do you do that? Today, we're continuing our "Keep your eye on the ball" series with two more habits to help you stay locked in — regardless of what's happening around you.

- David

Luxury home prices are surging

The median luxury home price rose 3.6% year over year to nearly $1.39 million during the three months ending April 30. By comparison, non-luxury home prices rose just 1.4%. That’s according to Redfin’s latest update on the U.S. luxe market.

Here are the key takeaways:

• High-end buyers are still active: Pending luxury home sales increased 2.7% year over year, while pending sales for non-luxury homes declined 3.4%, highlighting the growing divide between affluent and middle-income buyers.

• Luxury inventory is growing faster: New luxury listings rose 2% year over year, compared to just 0.6% growth for non-luxury homes. Active luxury listings also climbed 7.3%, giving wealthy buyers more options.

• Affluent buyers remain less sensitive to mortgage rates: Redfin says many luxury buyers either pay cash or have substantial equity from previous home sales and stock-market gains, insulating them from elevated borrowing costs.

• Tech-driven markets are leading luxury demand: San Francisco posted the largest increase in luxury pending sales among major metros, jumping 33.5% year over year. Luxury prices in the Bay Area also continued to outperform most of the country.

My take

The luxury market is increasingly behaving like a separate housing economy. Wealthier buyers are still benefiting from stock-market gains, accumulated equity, and cash reserves, while middle-income buyers remain far more constrained by mortgage rates and affordability pressures. This divergence is the K-shaped economy playing out in real estate — luxury continues to outperform while much of the broader housing market remains sluggish. And, at least for now, there’s little evidence that gap is narrowing anytime soon.

International buyers are slowly returning to the U.S. housing market

In Q1 2026, international home shoppers accounted for 1.6% of online U.S. housing demand. That was down slightly from 1.8% a year earlier, but still above the pre-pandemic level of 1.2% recorded in Q1 2020.

According to Realtor.com, international demand has continued shifting away from Los Angeles, where traffic share has fallen from 7.9% in Q1 2020 to 4.6% in Q1 2026. Dallas, Miami, and New York City have emerged as some of the biggest beneficiaries of that shift.

Canada remained the largest source of international home-shopping traffic to the U.S., accounting for 37.8% of demand in Q1 2026. That was up from 34.8% a year earlier, though still below the 41.8% share recorded in Q1 2024 before U.S. tariffs on Canadian goods were introduced.

Here were the top 10 U.S. destinations for international home shoppers in Q1 2026:

1. Miami, FL: 10.3%

2. New York, NY: 4.7%

3. Los Angeles, CA: 4.6%

4. Orlando, FL: 3.0%

5. Tampa, FL: 2.8%

6. Dallas, TX: 2.7%

7. Phoenix, AZ: 2.7%

8. Houston, TX: 2.4%

9. Cape Coral, FL: 2.0%

10. Riverside, CA: 1.7%

My take

International demand is recovering, but it’s still selective and well below the frenzy we saw during the pandemic-era boom. Miami continues to dominate because it offers what many international buyers want most: lifestyle, global connectivity, and relative tax advantages. Meanwhile, Dallas and Houston gaining traction is another sign that affordability and long-term economic growth are becoming bigger factors in where global buyers look next. The bigger story, though, may be Los Angeles losing ground. For years, L.A. was the default gateway market for international capital. That grip is clearly weakening.

All-cash sales fell to the lowest March share since 2020

28.8% of U.S. homebuyers paid in all cash in March, down from 29.8% a year earlier, according to Redfin. That ties 2021 for the lowest March share since 2020.

March 2026 is the most recent month for which data is available. An all-cash purchase refers to a transaction where there is no mortgage loan information included on the deed.

All-cash purchases surged to nearly 35% of home sales in 2023 as mortgage rates climbed to almost 8%, pushing financed buyers out of the market and giving wealthy buyers and investors a larger share of activity.

Here are the metros where all-cash purchases were the most and least common:

My take

This decline in all-cash purchases may not last very long. The March data came during a period when mortgage rates had eased a bit, which helped bring more financed buyers back into the market. But now that rates are back above 6.5%, we could easily see cash buyers start taking a bigger share of the market again in future data. High mortgage rates tend to give an advantage to wealthy buyers, retirees, and investors who can avoid financing altogether. Even with this recent pullback, cash buyers still make up a historically large portion of the housing market.

Schematics

The news that just missed the cut

• The changing shape of luxury real estate  

• Realtracs is the latest MLS to threaten Zillow feed access

• 10 cheapest places to live in the U.S.

• These red-hot housing markets are finally getting more attainable

• How to handle “Your competitor is cheaper” objection without losing the deal

Foundation Plans

Advice from David to win the day

Last week we started our “Keep your eye on the ball” series, where we’re covering practical ways to stay focused, protect your time, and keep your business moving no matter what’s happening around you.

The reality is that there will always be distractions competing for your attention — industry headlines, market volatility, social media noise, and breaking news. But the agents who consistently perform at a high level are usually the ones who stay on target: the activities that actually generate income.

Today, we’re covering two more habits that help keep your business moving forward no matter what’s happening around you.

1. Be aggressively responsive – One of the fastest ways to separate yourself from other agents is simple: respond quickly. Calls, texts, emails, follow-ups — handle them the same day whenever possible. A surprising amount of business is lost because agents let conversations go cold. Responsiveness builds trust, keeps deals moving, and signals professionalism in a business where many agents struggle with communication.

2. Reconnect with old leads using useful new market intel –Not every prospect who disappeared was a bad lead. Sometimes the timing just wasn’t right. Go back through your database and reconnect with people you spoke to six or twelve months ago. Instead of sending a generic “checking in” message, lead with something useful about your local market. A relevant piece of information often creates a much stronger reason to restart the conversation.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it.

Have a wonderful week. We’ll see you back here on Friday!

- David