The luxury homes segment in the U.S. is growing faster than the rest of the country, but the trend is being driven by the rising cost of living.
A new study from the real estate firm CoreLogic shows that in the first quarter of 2017, the average price of luxury homes in the United States grew by 2.2% to $764,400, according to the company.
That’s up from the average annual growth rate of 2.4% from the first nine months of 2016.
CoreLogic found that the average home in the luxury homes market has a price tag of $2.7 million, up from $2,632,000 in the same period last year.
That increase is driven by a 5.9% increase in average price over the past year.
In addition, the company found that luxury homes were more affordable to purchase this year than in any other year since the mid-1990s.
The median home sold for $1.9 million in the fourth quarter of 2016, up 14.6% from $1,839,000 a year earlier.
Corelogic also found that more than 40% of luxury home sales this year were to people over the age of 35.
In addition, luxury homes accounted for 17% of all sales in the year through June, up slightly from 15.7% a year ago.
The trend of luxury sales has become more prevalent as Americans become increasingly dissatisfied with the current economic conditions, and as many families move to more expensive homes.
CoreLogica says that the demand for luxury homes has increased as millennials and families have grown wealthier, with the median household income increasing by nearly 2.3% in the past five years.
According to CoreLogics data, the top-selling homes for the fourth-quarter of 2017 are a luxury home on the Lake Country in Florida ($2.6 million), a luxury ranch home in Texas ($2 million), and a ranch home on Lake Country, Arkansas ($2,300,000).