A 'lucky' segment of homeowners: the Zillow economist's report on America's housing market.

High prices and higher mortgage interest rates have had a negative impact on U.S. home sales. As Skylar Olsen, chief economist at Zillow, told MarketWatch, the lucky ones are homeowners who are deciding to downsize. U.S. home prices have risen significantly since the beginning of 2020, which will help them finance the purchase of their next home. Olsen added that the luckiest will be those who can afford to downsize their homes without taking out a mortgage.

Home downsizing can be profitable.

Although the number of U.S. home sales has declined, homeowners downsizing may still benefit amid strong price gains, an economist told MarketWatch. "I say they're the lucky ones because''what's happened over the last three years has been astounding and, in some ways, like a lottery,' said Skylar Olsen, chief economist at real estate company Zillow.

Prices in the U.S. real estate market

For full understanding, the value of the U.S. housing market has increased 50 percent since the pandemic began in January 2020 and is now worth about $52 trillion, according to Zillow. According to the Zillow report, California is the most valuable real estate market in the US. Its value exceeds $10 trillion, nearly 20% of the national value.

High home prices and declining sales

Average price of existing''s home in the U.S. rose 53%, from $266,300 in January 2020 to $407,100 in August 2023, according to the National Association of Realtors. High home prices and mortgage interest rates have affected home sales, which have fallen to about 4 million homes per year, from 6.6 million homes per year at the end of 2020, according to the NAR (National Association of Realtors).

The opportunity to downsize homes without debt.

Thanks to staggering price increases, some people can cash out and downsize to a smaller home without taking on debt. Zillow's Olsen also added in an interview with MarketWatch that the "lucky person" will be the one who can afford their next home without taking out a mortgage.

Older generations and mortgages

It is to be expected that the oldest age''don't have a mortgage. Nearly 78% of those who owned their home without a mortgage in 2021 were over the age of 55, the latest data from the U.S. Census Bureau showed. The NAR study, released in March, indicates that boomers between the ages of 58 and 76 are the leaders in selling and buying homes. In 2022, 52% of home sellers were boomers, up from 42% in 2021, the NAR analysis report indicated. They were also the largest home buyers, purchasing 39% of all homes in 2022, up from 29% in 2021.

Millennials and the real estate market

Rising home prices and strong demand from boomers have led to many millennials being priced out of the homebuyer market, Insider reports, citing data from''April. Just 28% of millennials were homebuyers in 2022 - a significant decrease from 43% the previous year.