Mortgage buyers prefer rural to urban life
The shift from urban to rural areas may appear to be a response exclusively linked to the pandemic, with workers able to work remotely seeking less dense pastures. But a recent report indicates that the movement from urban to rural areas began before COVID-19[female[feminine was not on anyone’s radar.
Between 2010 and 2019, mortgaged real estate purchases:
- increased by 3% in rural areas;
- increased by 2% in suburban areas; and
- decreases by 5% in Urban areas, according to Freddie Mac.
At the start of the 2010 decade, mortgage loans for the purchase of owner-occupied single-family homes in urban areas 22% of total mortgage purchases. In 2019, that number fell to 17%.
Alternatively, mortgages for the purchase of owner-occupied single-family homes in rural areas in 2010 accounted for 17% of total mortgage purchases. By the end of the decade, the share rose to 21%, overtaking urban purchases.
However, this correlation does not take cash purchases into account. Thus, the move to rural areas most closely reflects the demand of homebuyers who depend on mortgage financing.
Today, the mortgage market is larger in rural areas than in urban areas.
Meanwhile, the share of mortgage purchases in suburban areas has remained about the same over the past decade, at around 62%.
Suburban areas have by far the highest volume of home purchases, but demand is growing faster in rural areas.
However, most of the growth that occurs in rural areas occurs in rural areas that are still close to metropolitan areas. In other words, home buyers are willing to sacrifice convenience for space, but they still want to be within driving distance of amenities.
Urban theft continues – is the future rural?
Will this urban exodus and rural growth continue throughout the 2020s?
It may seem that the urban exodus is imminent, when we reflect on the past year. With the possibility of remote work accessible to a growing number of people during the pandemic, it was less and less necessary to be in city centers. Spending more time at home has increased the demand for outdoor space. Many restaurants, retail stores, and other amenities have closed, dispelling many attractions for the urban space.
however, jobs and their location is a factor that decides where people will go.
Those who have a job are mainly related to the location of their work. Here in California, the most jobs are among the major California subways. When jobs return, they return most quickly to city centers.
In addition to the growth of urban areas through employment, cities also appeal to the younger generations of tenants and buyers, such as Millennials and Generation Z (Generation Z). These generations are entering their first years of home buying and are drawn to urban areas for the opportunities they offer.
first tuesday urban demand forecasts will come back. Although the first half of the 2020s can be characterized by an imbalance in demand, once the economic recovery begins from 2024-2025, we can expect a return of jobs in these metropolitan areas, as well as of the demand for housing.
Is the pandemic-induced suburban rush here to stay?