As my colleague Chris Pardo wrote about recently, there’s been plenty of chatter lately about a “great migration” out of large U.S. cities due to concerns over the COVID-19 pandemic.
Ultimately, the situation is a bit more complex, so it’s hard to say definitively that a great migration is underway. But looking deeper at some of the studies Chris cited, this data point jumped out to me: More than 52% of Americans are looking to buy a new home that costs 10% less than their current one, according to the online freelancing platform Upwork.
The Federal Reserve Bank of Dallas also recently reported on the decreased demand for housing in dense areas. Put together, these trends suggest that home buyers are seeking cheaper homes in suburban or even rural areas.
The latter part of the previous statement isn’t too hard to imagine. While the trend in recent years before the pandemic had been a shift toward more urbanization, there have always been people who want to “get away from it all” and move out of the city. Now, we just might see a larger crowd in this camp.
Whether they find cheaper homes in the countryside is a bigger question. Even after adjusting for inflation, U.S. home prices have climbed drastically in the last eight decades, and the increases are often well ahead of the rate of inflation. It’s still too early to say whether the pandemic will slow down this trend long term, but recent figures suggest prices are still rising. So those looking for deals will probably need to focus on smaller homes or find the classic “fixer-upper.”
The housing market, a bright spot in the U.S. economy, has surged as more Americans seek homes in smaller and cheaper locations. More than 52% of Americans are looking to buy a new home that costs 10% less than their current one, according to Upwork, which also stands to benefit from the rise in telework.