If you have tried to buy a home in recent months, you will surely have already noticed something: prices are through the roof. Although the joy goes by neighborhood because the real estate market is experiencing a historic split, at least in the United States, as Redfin documents. Thus, while luxury housing is reviving thanks to the gains generated by the AI boom, everything else is paralyzed in a scenario of uncertainty, high mortgage rates, inflation and fear of unemployment.
It is the economics in K at its peak, a term coined by economists during the pandemic to refer to a recovery in which the wealthiest segments of society prosper while the rest stagnate or regress.
what’s happening. According to the Redfin report Last month, the average sales price of a luxury home in the United States rose 3.6%, to $1.39 million. This figure is more than double the increase recorded in “non-luxury” homes, which increased by 1.4 to stand at $377,734. One fact: Redfin defines “luxury” as homes in the top 5% of the price range in each metropolitan area.
At the epicenter of the luxury market, San Francisco: recorded a 48% year-over-year increase in pending sales of luxury homes in April, the highest peak since June 2021. We are talking about a median sales price of $6.7 million, almost 10% more than the previous year. They are followed by other cities such as Tampa (+36%), West Palm Beach (+16%) or Miami (+15%).
Why is it important. Because what is happening is not something limited to the real estate market: it is a snapshot of economic inequality in real time. The stock market and the rise of artificial intelligence are accelerating this dynamic. Thus, those who have their assets invested in technology stocks are becoming exponentially richer and then spending part of their profits on the purchase of luxury homes regardless of interest rates, something that does affect and worry the middle classes.
The housing has historically been the main repository for wealth accumulation, but its access is being restricted to the richest people. The result is a real estate market that operates at two speeds, which has consequences for social stability and long-term access to housing.
Context. This 2026, the energy shock derived from the US and Israeli attack on Iran has raised rates again, but as pick up Axiosthis pattern has been repeated several times in recent years: the luxury market recorded a peak in demand in 2021 with the uncertainty generated by the pandemic and also in 2023, when again mortgage rates, inflation and fear of recession stopped the average buyer. The dynamic repeats itself: in times of uncertainty, the most resilient thing is luxury.
It doesn’t just happen in the United States. The luxury real estate boom is not just American. Dubai closed 2025 with 500 sales above 10 million dollars (+194% in five years) and prime prices rose 3.2% on a global average, according to the Knight Frank Wealth Report 2026. London is the exception that proves the rule: He raised taxes on large wealth groups and prime prices fell by 4.8% in 2025, so that capital looked for alternative destinations with two clear winners: Madrid and Milan.
In fact, the Spanish capital boasts the highest growth in Europe: prime prices rose 6.4% in 2025 with 55% of international buyers, according to Knight Frank. In Milan, Italy’s flat-rate tax regime for new residents has skyrocketed interest: British buyers grew by 260% between 2023 and 2025, according to Il Sole 24 Ore. There is a gap between luxury and affordable housing and the only thing that can accelerate or slow it down is the fiscal framework.
In detail. San Francisco real estate companies are clear about what is causing this phenomenon in 2026: “AI money”, people who have shares in those technology companies that are skyrocketing and also profiles that artificial intelligence companies hire with generous bonuses.
Daryl Fairweather, chief economist at Redfin, explains that these wealthy buyers have more confidence in the economy and simply move forward despite the uncertainty. The high-end home builder Toll Brothers, details that their buyers are less sensitive to price pressures because they have a good cushion. In fact, cash purchases without the need for a mortgage are reaching historic highs with one neighborhood as a star destination: Manhattan.
Yes, but. Other real estate agents have another explanation for the rise in prices: a correction after years of slow sales, as reported by the San Francisco Standard. That is, we do not know how much of this boom is new demand that AI brings under its arm and how much is repressed demand. On the other hand, this phenomenon is geographically concentrated, which limits the possibility of generalizing its conclusions. If we leave the premium market, one thing is clear: global economic uncertainty is an anchor that holds back potential first-home buyers.
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Cover | Photo of Daniel Barnes in Unsplash
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