Due to the coronavirus pandemic, remote work has been on the rise, and it could impact the homeownership rate. According to a new Zillow® analysis, the increase in remote work could potentially unlock homeownership for almost two million renter households.
This potential highly depends on location and starter-home affordability. In San Francisco, for example, 22 percent of renters are priced out of their metro area, but they can afford monthly payments on a typical U.S. starter home (estimated at $725). With commuting constraints out of the way, that leaves the option for purchasing farther away from work.
“If remote work becomes a bona fide long-term option especially with the pandemic, that could reshape the U.S. housing market by opening up homeownership to people renting in expensive parts of the country,” said Zillow economist Jeff Tucker. “However, it’s unclear how many people would make the move to buy their first home. Proximity to work is just one of the factors people consider when choosing where to live. Other factors may keep them from moving including proximity to friends and family, cultural and natural amenities, and their kids’ schools.”
The impact would be greatest for the millennial generation. According to Zillow, millennials represent nearly half of the 1.92 million renter households who could afford homeownership if they had the flexibility to work remotely.
“Two-thirds of our buyers are millennials,” said Zillow Premier Agent Holly Mellstrom, a Pelham, N.Y.-based associate broker at Julia B. Fee Sotheby’s International Realty. “They’re looking to put down roots and get more space for their money after high-rise city living. Many have young families and were planning to move to the suburbs in the future, but they’re making the move now because they don’t anticipate having to commute into the city to work every day.”
For some buyers, the pandemic has provided new options. For example, Chris Chan, 40, and his wife, Eunice Lee, 35, became homeowners during the pandemic, according to Zillow.
“The tipping point was envisioning both of us working from home indefinitely alongside our daughter and a second child on the way,” said Chan, who works in Connecticut. “We wanted to maintain the balance between space and proximity to the city. We could get more for our money just outside city limits and we’re still only 30 minutes from Grand Central Station.”
For more information, please visit www.zillow.com.
