Despite ranking among the most valuable housing markets in the nation, the overall value of Phoenix real estate fell on an annual basis, according to a new report from Zillow.

The total value of the U.S. housing market jumped to $52 trillion in the past year. That’s $1.1 trillion higher than the previous peak hit in June of 2022 and $2.6 trillion higher year over year. Zillow attributes this surge, in part, to the 0.7% increase in the average value of a U.S. home during the same time period.

However, the major catalyst behind the boost was new construction.

“A steady flow of new homes hit the market this spring and summer, helping chip away at the deep inventory deficit and boosting the total value of the market,” Zillow Senior Economist Orphe Divounguy said in the report. “Despite the presence of higher mortgage rates, which deterred some home shoppers and kept many existing homeowners on the sidelines, enough buyers remained to keep the market moving.

“Builders recognized the unmet demand and responded by starting more projects,” Divounguy continued. “New home sales rose this year while existing home sales fell and should make up a bigger piece of the home sales pie for as long as rates remain elevated.”

Phoenix’s housing market ranked as the 12th most valuable in June with a total dollar value of $903 billion. However, the metro’s overall value has actually decreased by 2.1% since last year — that amounts to $19.5 billion.

Meanwhile, New York City ranked as the most valuable metropolitan area in the country at over $4.2 trillion, increasing in value by 4.2% from June 2022 to June 2023. New York was followed by Los Angeles, San Francisco and Boston.