Remote work practices may be sparking a new residential trend away from urban areas. City dwellers, accustomed to living in small, high-priced apartments, are now looking for bigger spaces in the suburbs.
Rents are rising in suburban markets outside major cities, such as Washington D.C., San Francisco and Los Angeles, according to data firm CoStar Group Inc. Analysts say these areas allow residents more space and lower rents, while keeping them near enough to work for those now only occasional trips to the office.
Meanwhile, Zillow reports that home prices in the suburbs are up over a year ago, while inventory remains limited. Home buyers are eager to take advantage of low mortgage rates, but the number of available homes hit record lows this year.
Homebuilders haven’t been able to keep up with the demand either. Builders are faced with COVID-era supply shortages, soaring lumber prices and ongoing competition for skilled labor.
Shortages in the housing market and rental inventory that no longer meets current demand mean renters and buyers are both struggling to get where they want to be. Price increases are threatening to push both homeownership and suburban rentals out of reach.