By Michael Zarola | Builder
While COVID-19 continues to bring uncertainty to the world, one thing is for certain—it has and will continue to reshuffle the residential real estate market on a large scale. Much of this may be irreversible, since this change is not a function of an event where consumer habits tend to shift back to what is considered normal. Instead, the COVID-19 pandemic has begged the question “What is the new ‘normal’?”
Changing Market Dynamics
The pandemic is accelerating shifts in residential real estate that are being driven by a few key dynamics, which are expected to continue to impact the residential market for the foreseeable future:
- Millennials, the largest generational group in U.S. history, have begun growing their families and embracing the American dream of homeownership.
- Working from home is affording a large group of consumers the flexibility of working from anywhere, most notably from suburban or rural areas.
- Affordability, a priority for many consumers, is leading more home buyers into suburban neighborhoods and away from higher-cost, close-in locations where appreciation has far outpaced income growth.
- Mortgage interest rates are at a historic low point, making homeownership more achievable and appealing to renters than ever.