Teleworking Could Turn Two Million Renter Households in Home Owners
With nearly half of Americans theoretically able to telecommute, Zillow found that almost 2 million American renters living in pricey metro regions could afford starter homes in less expensive parts of the country.
As more companies begin to offer remote work for employees, it could present Americans renting in expensive metro areas with the opportunity to buy starter homes in affordable parts of the country, according to a new analysis.
A recent report by Zillow found that nearly two million renter households could buy starter homes, if they’re allowed to telework. The remote work option would allow many of those renters to leave expensive coastal markets where properties are out of their price range, and move to other locations where a starter home is more affordable.
The typical starter home is valued at $131,740, according to Zillow, but that price can be significantly higher in 37 of the country’s 50 biggest metro areas. “As a result, owning even a modest home is out of reach for many households as long as they need to be within commuting distance of a physical workplace,” Zillow data analyst Treh Manhertz wrote.
The Zillow analysis examined renter households who could afford monthly payments on a typical starter home, but not in their metro area. Analysts then determined those households’ ability to telework based on income, job industry and the job itself.
The analysis found that half of the 1.92 million renters who could buy homes if allowed to telework are millennials.
The analysis takes into account that nearly half—43.6%—of American workers are in jobs where they could theoretically telework. “Over the past six months, many companies have found that their workforce can function better remotely than originally thought,” Manhertz wrote. “If telework becomes more of a norm, and businesses allow it where possible, this could give millions of Americans more choice over their home and home finances.”
Zillow found that the San Francisco Bay area—known for being more expensive than other metro regions—has the most renters who could afford starter homes in other parts of the country. Twenty-two percent of renters in San Francisco renters could do so if allowed to telework, as could 25.5% of San Jose renters.
However, not all Americans would have to leave their metro regions to buy a starter home: The analysis shows that in 13 of the country’s largest metro areas, those homes are actually less than the median price of the typical starter home.
The report also notes some Americans may not want to leave metro areas even if it means being able to buy a home, pointing to the draws of renting in a major city like New York as opposed to living in quieter suburbs.