Over the past year, many Americans chose to take advantage of their newfound ability to work from home and move. This trend may be contributing to the record home price growth that’s occurring across the country, but at the same time, people who’ve moved are seeing a financial benefit, according to a new report from Zillow.
By and large, Americans chose bigger — and less expensive — homes, particularly if they moved across state lines. Zillow’s analysis looked at data from North American Van Lines, a trucking company based in Ft. Wayne, Indiana. This was “a notable reversal of trends from prior years,” Zillow economist Jeff Tucker said in the report.
The average home value in the ZIP codes that movers left was $419,344, versus $392,381 for the ZIP codes they relocated to. That represents a difference of roughly $27,000.
But a cheaper home doesn’t mean a smaller one. While the average size of the homes movers left behind was the largest since Zillow
began tracking this data in 2016, the average size of the new homes people chose was even larger. The average difference in size, according to the analysis, was 33 square feet.
“Clearly, it seems the nation’s interstate movers were particularly motivated to get more house for less money in 2020,” Tucker wrote. “And most did so in the tried-and-true American way: By moving to the suburbs.”
Separate research has shown that there was significant out-migration from major cities, but in most cases people moved to a “donut” of suburbs around those cities, rather than relocating across the country. Researchers argue this trend suggests that most Americans expect that they will have a hybrid work setup in the future, where they split their time between the office and working from home, rather than fully being remote.
Overall, Zillow argues that a “Great Reshuffling” is happening “as Americans rethink where they live and seek to decouple their home location from their office location as telework opportunities grow,” Tucker wrote.
This is allowing Americans to get the most bang for their buck in the housing market, rather than needing to sacrifice affordability or space in the name of living closer to urban centers.
In the long term, this trend could lead to home prices becoming more even across the country and lead to less concentration of wealth in certain cities, Tucker said.