If you are like Bible prophecy, the New Jerusalem “heavenly city” of Revelation 21 is a point of considerable interest. Like most other things in Revelation, it is interpreted literally by dispensationalists. According to them, it is a fully functioning real city that has a length, width, and height of 12,000 furlongs/stadia—about 1,380 miles. Some interpreters see this as a cube; others see it as a pyramid. But in either case, it is enormous! It is two-thirds the size of the moon, which is about 2,100 miles in diameter. It has literal foundation stones, but only a single street.
If the New Jerusalem was a literal city, it would cover the entire Middle East, including all of Egypt, Turkey, Syria, Jordan, Israel, Saudi Arabia, and a huge section of the Mediterranean Sea as well as several parts of other neighboring countries—not to mention extending 1,200 miles beyond the International Space Station which is in a 220-mile low orbit. This image immediately conjures up legitimate questions about gravitational mechanics. Would this enormous appendage wobble the earth? Hmmm.
The appearance is related to the idea of a literal millennium. Some dispensationalists say that the New Jerusalem is a post-millennial place that is the center of heaven. Others say that the massive heavenly Jerusalem is a “satellite city” that descends out of heaven to hover just above Palestine during the millennium. This New Jerusalem will be above the earth, in the air, shedding its light and glory thereon. Christ will resurrect the saved of all ages, except of course, for the “in Christ” saints who were resurrected or raptured seven years earlier and who presumably have been in heaven temporarily.
The heavenly Jerusalem will become the residence of believers who are not on earth, though there is some disagreement who will be on earth and who will be in the heavenly Jerusalem. In general, all resurrected saints (i.e., Old Testament saints, Christians raptured before the tribulation, and believers who came to faith during the tribulation, but were put to death by the Antichrist) will live in the New Jerusalem. Some say that the earth will be populated only by the Jews who survived the tribulation period. And some dispensationalists believe that there is opportunity to go back and forth between earth and the heavenly city at least for certain residents. Resurrected saints will play some role in Christ’s rule on the earth; their primary activity, however, will be in the New Heavenly Jerusalem. According to some, it will also serve as the eternal dwelling place of all believers in the “eternal state.” 
Can this be correct? Let us be perfectly frank, with due respect for our many brothers who believe all this, it is so bizarre that if it were not being taught in Christian churches, it would certainly be considered cultic, or science fiction. But this craziness is where you can end up if you decide in advance to take everything in the Bible in a wooden literal fashion while completely misunderstanding Hebraic figures of speech, and ignoring the critical context that restricts the timing of events in Revelation.
There is a biblical view of the New Jerusalem. Let me demonstrate that it is the new covenant church. First, we note that in Galatians 4:21-31 Paul discusses the change of the covenants in terms of the old and new Jerusalem. In a related sense, the Israel of God is the spiritual kingdom of Christ (Romans 11; Galatians 4:22-31; Hebrews 11:10, 16; 12:18-24)—which is also the new covenant church. And take note of this: In Hebrews 12:22 we read, “But you have come to Mount Zion and to the city of the living God, the heavenly Jerusalem.”
The New Jerusalem was already a reality for the first-century believers.
The foundations of the New Jerusalem are the “twelve apostles of the Lamb” (Revelation 21:14). Paul, in Ephesians 2:18-22, uses identical language about citizenship in the “household of God” as having been “built on the foundation of the apostles and prophets.” The building/city motif is Pauline theology concerning the church!
In Revelation 21:4 we read that the first things (old order of things/former things) have passed away. This is clearly speaking of the end of the old covenant. In Revelation 21:1-7 we see that “The dwelling place of God is with man. He will dwell with them, and they will be his people.” So, again, this about the new covenant relationship with God’s people, not a literal city or building. Nor is it about heaven, as some people suppose.
Indeed, the church no longer needs a temple because Christ brings the presence of God to his people. Christ replaced the temple (Revelation 21:22). This is theologically significant because no longer could anyone claim that salvation was in the temple rituals. Salvation rests only in Christ.
The New Jerusalem is the bride (Revelation 21:2), which means the bride of Christ (Matthew 22:1-14; John 3:29; 2 Corinthians 11:2; Ephesians 5:22-32; Revelation 19:7-8). The picture that is painted for us by John is that Israel was a harlot (Revelation 17:1, 5, 15; 19:2). Israel was the original bride of the LORD (Jeremiah 2:1). But, throughout the Bible, whenever Israel is unfaithful, she is characterized as a “harlot” and an “adulterer.” See: Deuteronomy 31:16-18; Isaiah 1:21; Jeremiah 2:20; 3:6-9; Ezekiel 16:15, 26, 28; Hosea 9:1. For her marital unfaithfulness, she received divorce and punishment. Then we see the new bride—the church— coming to take her place. Old Covenant Jerusalem is destroyed and replaced by the New Jerusalem of which first-century Christians were citizens, built on the foundation of the apostles (Ephesians 2:19-22; 1 Peter 2:5).
But there is more. In Revelation 21:5 we see that “To the thirsty I will give from the spring of the water of life without payment.” Who receives this water of life? Is this only a future thing? Certainly not. The water of life is available to all who accept Jesus. Various texts demonstrate this truth. For example, in a clearly Messianic prophecy, Isaiah 55:1 promises that “Come, everyone who thirsts, come to the waters.” This is the promise of a new, everlasting covenant per Isaiah 55:3! In John 4:14 and 7:38 Jesus promised that whoever drinks of the living water he offers will have eternal life.
The ending chapters of Revelation describe a series of events that are consummated together: the new heaven and new earth and New Jerusalem, which are the New Covenant church order, the dissolution of hades, the final defeat of death and Satan, and the Parousia—marking the beginning of the established and victorious eternal reign of Christ.
It is critical to grasp that there are over 30 statements throughout Revelation that restrict its fulfillment to the events of the first century surrounding the destruction of Jerusalem and the temple in AD 70. At that time, the visible fabric of the Old Covenant order was swept away. The events were to happen SOON, WITHOUT DELAY, and MUST SHORTLY TAKE PLACE (Revelation 1:1-3; 22:6-20; etc.)
Here’s a helpful article about the New Jerusalem of dispensationalism:
 John Walvoord, a leading dispensationalist scholar, speculated, “If the new Jerusalem is in existence throughout the millennial reign of Christ, it is possible that it is a satellite city suspended over the earth during the thousand-year reign of Christ as the dwelling place of resurrected and translated saints who also have access to the earthly scene.” Source: https://postmillennialworldview.com/2014/05/23/dispensationalism-and-the-new-jerusalem
See also Walvoord’s article: https://walvoord.com/article/76
Here’s how this view is expressed from one source: “As the New Jerusalem will not be on the millennial earth, some have postulated the possibility that the New Jerusalem will be a satellite city over the earth during the Millennium and as such would be the home of resurrected and translated saints. They would be able to go from the New Jerusalem to the millennial earth much as people today have their home in the country and go to the office in the city.” (https://learntheology.com/the-millennium-and-the-new-jerusalem.html)
Here a sampling of other dispensational sources that teach that the New Jerusalem exists during the millennium:
 The Ryrie Study Bible, page 1920.