Households earning at least $500,000 per year represent a tiny but influential segment of Missouri’s housing market. These ultra-high-income families have distinct homebuying patterns that set them apart. Explore their purchasing trends from 2018 through 2023, including primary residence purchases, vacation-home, and investment-property activity.

Missouri’s $500K+ Earners: A Growing Elite Segment

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Missouri households making $500,000 or more annually are exceedingly rare – such an income falls above the threshold of the state’s top 1% (around $428,000 in 2023). In raw numbers, this equates to only a few thousand households in a state of over 6 million people. However, this elite cohort has expanded and prospered in recent years. Between 2018 and 2023, the average income of Missouri’s top 5% of households jumped from about $324,853 to $420,563, a nearly 30% increase, far outpacing inflation.

Unsurprisingly, the vast majority of these $500K+ households are homeowners. Many also own multiple properties. Demographically, they tend to be in mid-to-late career stages. They are often power couples (dual high salaries) or top professionals (executives, physicians, attorneys, successful entrepreneurs). They are frequently married and in their 40s, 50s or early 60s, sometimes with older children. This life stage often prompts purchases of large “forever homes” for family comfort – or conversely, downsized luxury condos once children leave the nest.

Geographic Distribution

St. Louis and Kansas City (including their upscale suburbs) account for the bulk of $500K+ earners and thus high-end home sales. Mid-sized cities like Columbia have a smaller share of affluent buyers – typically top surgeons or administrators. In rural Missouri, $500K earners are scarce, but rural resort destinations (notably the Lake of the Ozarks region) attract purchases by wealthy urbanites seeking second homes.

Primary Residence Purchases: Market Evolution 2018-2023

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Pre-Pandemic (2018-2019)

In the late 2010s, Missouri’s economy was solid and housing market stable, so affluent buyers were active but measured. Many were “upsizing” – leveraging their growing incomes to move from starter homes into larger luxury properties. Others relocating for executive jobs were buying into Missouri from out-of-state, drawn by the relatively low cost of high-end homes. Interest rates during 2018–19 hovered in the 4% range for 30-year mortgages, which was historically low and favorable for buyers.

Pandemic Boom (2020-2021)

The COVID-19 pandemic dramatically altered homebuying dynamics. High-income households seized the unique opportunities of this period. Mortgage interest rates plummeted to record lows – the 30-year fixed rate hit an unprecedented 2.65% in January 2021 – effectively making money cheap for those who chose to finance a home.

Many wealthy Missourians upgraded to larger houses with more space, home offices, and amenities to ride out the pandemic in comfort. Others who already owned substantial homes doubled down by purchasing vacation retreats or investment homes. This rush of demand contributed to bidding wars even at the high end. Price growth for luxury homes far outpaced the broader market during this time: nationally, the median luxury home price soared ~9% year-over-year in late 2021–2022, roughly twice the rate of non-luxury price gains.

Post-Boom Resilience (2022-2023)

By 2022–2023 the landscape shifted again. The Federal Reserve’s interest rate hikes pushed mortgage rates above 7% by late 2023, cooling the overall housing market. Some wealthy buyers became more cautious, especially about taking on new mortgages when their existing loans carried ultra-low pandemic rates.

Yet, Missouri’s elite largely weathered this storm. Many affluent purchases continued unabated thanks to cash: a record share of luxury buyers nationwide (nearly 46.5% in Q4 2023) paid all cash, rendering interest rates almost irrelevant for roughly half of high-end transactions. Moreover, the supply of luxury listings remained so tight that competition persisted. “It’s still a seller’s market, especially for single-family [homes]” in top St. Louis neighborhoods, noted a local agent in late 2023.

Property Types and Buyer Preferences

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Luxury Single-Family Homes

The prototypical primary residence purchase for a $500K-income household in Missouri is a large single-family home in an upscale suburb. These are often newly built or recently renovated houses boasting 4+ bedrooms, 3,500+ square feet, ample land, and premium finishes. Neighborhoods with top-rated schools, country clubs, and estate-sized lots (e.g., Ladue, Frontenac, and Chesterfield around St. Louis; Mission Hills and Clayton around Kansas City) are perennially popular.

Such properties typically range from the high six figures into the low seven figures in price. Notably, even the top 10% of the St. Louis market has a median listing price of only ~$699,000 – reflecting the region’s affordable luxury. A $1 million budget in Missouri can secure a true mansion, whereas in coastal cities it might barely buy a starter home.

The Rise of Luxury Condos

A subset of wealthy buyers were “downsizers”: typically empty-nesters in their 60s who sold large suburban houses and opted for luxury condominiums or townhouses with less maintenance. Missouri’s major cities have seen a blossoming of high-end condo developments to cater to this group.

In St. Louis, luxury condo projects in central neighborhoods (Clayton, Central West End, Kirkwood, etc.) found a niche among affluent retirees and professionals seeking a “lock-and-leave” lifestyle. A record-breaking $1.065 million condo sale in Clayton in 2021 made local news, underlining the demand for upscale apartment living. These units offer amenities like doormen, fitness centers, and walkability that appeal to those coming from large homes but not wanting to sacrifice comfort.

Custom-Built Homes

New construction is another preference of high-income buyers. Custom-built homes in gated communities or new subdivisions are popular, as they allow buyers to tailor design and get modern features. Many $500K+ earners commissioned custom homes during the period, taking advantage of low financing in 2020–21.

Missouri’s homebuilders responded with more high-end offerings. For instance, the Wildhorse Village development in Chesterfield broke ground with multi-million-dollar homes and condos, directly targeting affluent downsizers and move-up buyers. In Columbia, high earners often built on the outskirts in tranquil acreage estates, blending luxury with the Mid-Missouri countryside.

Regional Market Dynamics

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St. Louis: A Luxury Market Leader

The St. Louis metro area has been a standout market for high-end real estate in recent years. In fact, St. Louis ranked as the #1 “hottest” luxury housing market in the U.S. for multiple quarters in 2023–2024, according to the Wall Street Journal/Realtor.com index.

Local conditions explain this surprising success: St. Louis offers relatively inexpensive luxury (median ~$700K for top-tier listings) combined with low inventory, creating intense competition for upscale homes. By late 2020, agents reported that well-heeled buyers were actively seeking larger estates and second homes in the area. Inventory of luxury homes plummeted – by the end of 2022, St. Louis’s high-end supply was 41% lower than pre-pandemic levels.

Prices on luxury properties in St. Louis rose about 6% year-over-year as of late 2023, despite the broader market cooling – a testament to excess demand. Notably, this boom has been driven by local buyers. Unlike Sunbelt luxury markets flooded by out-of-state transplants, St. Louis’s mansion buyers are predominantly St. Louisans (successful professionals, physicians at the large medical centers, business owners, etc.) trading up within the metro.

Kansas City: Strong and Steady Growth

The Kansas City metro (straddling Missouri and Kansas) is Missouri’s other major locus of wealthy homebuying. Many of Kansas City’s highest earners actually live on the Kansas side, but the Missouri side, including upscale areas like Country Club Plaza, Brookside, and Lee’s Summit, saw significant luxury purchase activity.

The late 2010s were a period of expansion in KC’s tech and corporate sectors, bringing in some new high-income residents. The pandemic similarly boosted Kansas City’s high-end market: wealthy buyers sought more space in suburban Missouri communities like Blue Springs and Parkville, as well as luxury condos in downtown KC.

By 2021, Kansas City’s median sale price had breached $300K and luxury segments well into seven figures were not uncommon. One difference from St. Louis was that Kansas City did attract some out-of-state remote workers during the pandemic, drawn to its low cost of living.

Columbia and Mid-Missouri: A Smaller Luxury Segment

Columbia, home to the University of Missouri, provides an interesting microcosm of high-income buying in a mid-sized city. The number of $500K+ earners in Columbia is limited (a handful of hospital chiefs, university administrators, and successful local entrepreneurs).

From 2018–2023, Columbia saw a few high-end developments targeted at wealthy buyers – for instance, a gated community on the edge of town featuring custom homes valued around $1–2 million. Many such buyers are long-time local business people or professors with inherited wealth, rather than transplants. They tend to favor secluded properties with land.

Columbia’s market also benefits from some spillover of St. Louis and Kansas City wealth – wealthy alumni who buy second homes in Columbia for football season, or even retirees from the big cities moving to Columbia for its college-town amenities.

Resort Areas: The Lake of the Ozarks Boom

One notable trend in the 2020–2023 period was the spike in purchases of vacation homes in Missouri’s resort areas by affluent buyers. The prime example is the Lake of the Ozarks, a large reservoir in central Missouri lined with vacation houses.

Already popular among Missouri’s wealthy for weekend getaways, the Ozarks had a banner period during the pandemic as people sought refuge and recreation away from cities. Nationwide, vacation home sales jumped 16% in 2020 and then an astonishing 57% year-over-year in early 2021. Agents at Lake of the Ozarks reported unprecedented demand in 2020–2021, with many homes receiving multiple offers. The average sale price around the lake hit roughly $495,000 by mid-2021 (a 15% annual increase).

High earners also invested in the Table Rock Lake/Branson area and Ozark Mountains cabins, though to a lesser extent. These purchases blur the line between “vacation” and “investment” – some owners intended to use the homes part-time and rent them out via Airbnb when away.

Investment Properties and Landlord Trends

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In addition to primary and vacation homes, many of Missouri’s $500K+ earners expanded their real estate portfolios with investment properties from 2018 to 2023. The period saw a national surge in real estate investment activity that included individual investors and institutions alike. By 2021–2022, investors were buying a record share of homes in the U.S. – on average, 13.8% of homes sold in 2022 were purchased by investors, up from ~12% in 2020.

During 2018–2019, some high-income Missourians began to acquire rental properties as the economy grew. But the real acceleration came in 2020–2021, when low interest rates and a booming rental market created ideal conditions for leveraging real estate. High earners who were not financially impacted by COVID looked to hard assets as a safe haven. Many channeled savings into rental houses – for example, a St. Louis doctor might buy a couple of $200K single-family rentals, aiming to capitalize on rising home values.

One noticeable trend was the interest of wealthy buyers in small multi-family buildings (duplexes, fourplexes) in Missouri’s urban cores. The attraction was twofold: diversification of assets and the strong post-2020 rent growth. Even with the mortgage rate increases in 2022–2023, cash-rich investors continued buying. By paying cash or putting down 50%+, they could still achieve positive cash flow despite 7% interest rates that squeezed leveraged middle-class investors out.

Historical Comparison: 2018–2023 vs. 2008–2017

When we compare 2018–2023 to the prior decade, the differences are striking. The late 2000s through mid-2010s encompassed the Great Recession and its aftermath, which hit the housing market hard – including the luxury segment. In Missouri, 2008–2011 were years of steep price declines and very few transactions. Wealthy households often adopted a wait-and-see approach on real estate.

The Market Recovery Period (2013-2017)

By the mid-2010s, the situation improved. 2013–2017 saw a broad housing market recovery and economic expansion. Missouri’s high-income households grew in number as the economy added jobs and the stock market boomed. However, the pace was moderate and linear compared to the rollercoaster of 2020–2023.

The tax environment pre-2018 was more favorable for wealthy homeowners in some ways. Before the Tax Cuts and Jobs Act (TCJA) took effect in 2018, buyers could deduct interest on mortgages up to $1 million (versus $750K after TCJA) and had no cap on state and local tax (SALT) deductions. This meant a Missouri household with a $1M mortgage and $20K in property taxes could write off the full interest and taxes on federal returns prior to 2018.

Price Trajectories and Market Psychology

In 2008–2017, Missouri home values first fell then gradually climbed back. By around 2016, many markets had just regained their pre-2008 price levels. Fast-forward: from 2018 to 2023, the FHFA House Price Index for Missouri jumped to over 511 – an increase of ~63% in six years. The pandemic-era appreciation was a big part of that jump.

This rapid run-up in values in 2020–2022 benefitted existing high-end owners (many of whom then tapped their equity or sold at a profit to upgrade). But it also meant higher entry costs for new buyers by 2023 compared to those who bought a decade prior. Nationally, by early 2022 a record 8.2% of U.S. homes were valued over $1 million – nearly double the share just before the pandemic.

The late 2000s taught a harsh lesson about housing risk, so the early 2010s high-end buyer was relatively cautious, often prioritizing value and long-term stability. By contrast, the late 2010s and especially the 2020–2021 buyer was operating in a paradigm of abundant liquidity and low opportunity cost. With interest rates near zero and stocks booming, buying real estate – even very expensive real estate – seemed a no-brainer to many wealthy individuals.

Conclusion

From 2018 through 2023, Missouri’s highest-earning households have significantly shaped the state’s housing trends. This era saw an unprecedented boom in luxury homebuying, fueled by rising incomes, cheap financing (at least for a time), and a pandemic-driven reevaluation of living spaces.

Households making $500K+ led the charge in snapping up luxury single-family homes in St. Louis and Kansas City’s posh suburbs, pushing those markets to record highs. They also invested heavily in vacation retreats at the Lake of the Ozarks and in rental properties, taking advantage of opportunities that the average buyer could not.

Compared to the prior decade, the recent trends feature faster growth, greater investment, and a resiliency in the face of economic swings – all underpinned by the financial strength of this affluent demographic. Missouri’s luxury real estate has enduring appeal to its rich residents, offering a combination of value, quality of life, and investment potential that is hard to beat.

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