Surveying renters and homeowners to see how work and housing preferences have changed since the onset of the pandemic, a recent Fannie Mae National Housing Survey reveals that a larger share of remote and hybrid workers reported a willingness to live farther from their workplace. Compared with 14% in 2021's third quarter, 22% were willing to move farther away in the first quarter of 2023.
According to the survey, for those considering homeownership, greater location flexibility also increases the odds of finding a home within budget. In a special topic analysis, Fannie Mae’s Economic & Strategic Research (ESR) Group asked respondents what factors are most important in selecting their next home. Neighborhood considerations and affordability topped the list.
In this year's first quarter, 30% of homeowner respondents reported affordability as a concern when considering a move, compared with 19% in the fourth quarter of 2014. Compared with 21% in the fourth quarter of 2014, 46% of renters noted affordability as the top consideration in the first quarter of 2023. The focus on affordability confirms the need for households to find ways to manage around the significant rise in mortgage rates, home prices, and rents of the past few years, Fannie Mae notes.
Despite headlines of the majority of workers being called back into the office, the percentage of fully remote and hybrid workers has remained constant in the post-pandemic era at 35% in the first quarter of this year compared with 36% in third quarter of 2021.
If potential home buyers can move to a different market—whether 10 miles out of town or a different metro completely—the premium attached to new-home construction may be less of a barrier for this group, the analysis notes, and has likely already contributed to the strength of new-home sales relative to existing-home sales over the past year.
For both renters and owners, the suburbs lead as the preferred location to buy a home. Up from 35% in third quarter of 2010, 38% of renters in the first quarter of 2023 preferred the suburbs, while 44% of owners in the first quarter preferred the suburbs compared with 37% in the third quarter of 2010.
The ESR Group states that the research holds broader implications for the link between housing and the labor market. As the share of remote-working renters and homeowners who are willing to live farther from their employer’s location grows, access to the wider labor market could be useful if economic activity leads to greater rates of job loss. Additionally, the access to a larger labor market could reduce the adverse effect on local home prices when a major employer or industry contracts, the analysis suggests.