Decoupling Where People Live from Where They Work: Fannie Mae

(Courtesy Fannie Mae)

A growing proportion of remote and hybrid workers are willing to live farther from their workplace, reported Fannie Mae, Washington, D.C.

“This may be an indication that some workers are feeling more secure about their remote work situation and/or their ability to find another job if their current employer were to change its policies,” Fannie Mae Deputy Chief Economist Mark Palim and National Housing Survey Lead Rachel Zimmerman said in a Perspectives blog post. “For those considering homeownership, greater location flexibility also increases the odds of finding a home within budget.”

As part of its National Housing Survey special topic analysis, Fannie Mae surveyed renters and homeowners to see how work and housing preferences have evolved since the COVID-19 pandemic. To track how attitudes have changed, they repeated questions from prior iterations of the NHS, including some dating back more than a decade.

Among the findings:

– The percentage of fully remote and hybrid workers has remained quite constant since the pandemic, indicating that remote and hybrid work may be here to stay despite headlines about companies demanding that workers return to the office.

– Fannie Mae also asked what factors are most important to respondents in selecting their next home. Affordability topped the list, substantiating the need of households to find ways to manage around the significant rise in mortgage rates, home prices and rents of the past few years.

– The traditional premium attached to new home construction may be less of a barrier to potential homebuyers if they can move to a different market, whether that’s ten miles farther out of town or a different metropolitan area entirely. “This could include suburban and rural areas, and it has likely already contributed to the strength of new home sales relative to existing home sales seen over the past year,” the commentary said.

– Fannie Mae found broader implications for the link between housing and the labor market. “In short, the growing share of remote-working renters and homeowners who are willing to live farther from their employer’s location implies access to a wider labor market, which could be useful if a downturn in economic activity led to greater rates of job loss,” the report said. “Having access to a larger labor market may also reduce the adverse effect on local home prices when a major employer or industry contracts.”

The full Fannie Mae report is available here.