- Priced-out renter households make up 4.5% of all renter households in US, according to Zillow
- Flexibility of remote worker could enable those renters to become homeowners
One of the chief consequences of the coronavirus has been the shift from office onsite to remote working. Though the latest statistics have yet to compare the numbers of remote workers in 2019 to those in 2020, we do know that, according to latest research from Buffer, that 80% of the estimated 4.6M remote workers in 2020, according to globalworkplaceanalytics.com, work from their homes.
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If the above data is accurate, then, according to Zillow, some 2M remote workers who currently rent could become homeowners. Zillow’s thinking is based on the assumption that priced-out renter householders living in the country’s most expensive metro markets make up 4.5% of all renter households in the US. With the option of remote work, many of those priced-out renter households living in expensive housing markets could afford to buy an average starter home in a more affordable housing market elsewhere in the US without losing their remote job.
Jeff Tucker, an economist with Zillow, said, “If remote becomes a bona fide long-term option especially with the pandemic, that could reshape the US housing market by opening up homeownership to people (currently) renting in expensive parts of the country.”
Tucker used San Francisco’s housing market, one of the country’s most expensive, as an example. A whopping 22% of renter households in San Francisco are essentially priced out of this housing market but, by remotely working, these renter households could live in a more affordable market, buy a home with a monthly mortgage payment of $775/month and not be priced out of homeownership which costs an average of $5,000/month in San Francisco.
Of course, proximity to work is just one of several factors (proximity to friends and family, children’s schools and cultural and environmental amenities) that people consider when choosing where to live and where to buy.
Tucker via Zillow believes that Millennials (now nearly 50% of the country’s 1.92M renter households that could afford a typical home outside of the most expensive metro housing markets) have the greater chance to benefit from working anywhere and living anywhere.
Tucker suggests that remote workers who may prefer homeownership to renting may want to consider looking at starter homes in metro areas such Phoenix, Denver, and Minneapolis while also checking out the most affordable places for starter homes…Pittsburgh, El Paso and Rochester NY.
Thanks to Zillow, globalworkplaceanalytics.com, Buffer and HousingWire.