Telecommuting is growing in popularity as more companies establish work-from-home protocols. With this new flexibility, nearly 2 million renter households could become homeowners, according to Zillow.
Renters who are employed with a job that could be done remotely and might be priced out of their current market could afford to buy the typical starter home elsewhere in the U.S.
“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 in a statement.
Currently, priced-out renter households make up 4.5% of all renter households in the U.S. Those households now have the opportunity to live in a more affordable market because they don’t need to commute to work.
For example, 22% of renters in San Francisco are priced out of their metro, but could afford monthly payments on the typical starter home in the U.S., at $725, Zillow said. This is because monthly payments on a typical starter home in San Francisco are at least seven times higher, at $5,181.
“However, it’s unclear how many people would make the move to buy their first home,” Tucker said. “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.”
According to Zillow, it’s Millennials who have the greater chance to become a homeowner, benefitting from having the ability to work from anywhere and live anywhere. This generation represents nearly half of the 1.92 million renter households who could afford homeownership.
Starter homes in some cities, such as Minneapolis, Phoenix and Denver, are more affordable than in the larger metro areas. In Denver, Zillow says starter homes in the city are more affordable than in the metro area, but even for those priced out of that metro, 14.5% of renter households could afford a typical starter home somewhere else in the U.S.
For renters interested in relocating somewhere with less expensive homes, Zillow identified the three most affordable places for starter homes in the country: Pittsburgh, El Paso, Texas and Rochester, New York.