Led by an increased interest among millennials, people are flooding new subdivisions where they are looking to upgrade their living situation.  But, based on interviews, they are also leaving densely populated, downtown neighborhoods due to the COVID-19 scare.

That’s because the “smart growth” ideal of dense, urban-centric dwelling doesn’t square with the reality of home quarantines and the message these individuals are getting from the health-care spokespeople in government.  “Keep away from other humans,” they’re saying.  Accordingly, more and more people see suburban life as more practical and less harmful to their health and safety than the crowded downtown apartment living they are leaving behind.

The National Association of Home Builders (NAHB) reports that “the pandemic has dramatically changed how most Americans view their homes.”  The trade association representing the country’s homebuilders says now “the need for more spaces within a home for work, schooling and exercise have driven many to evaluate where they live” and could be making the homebuying market in the suburbs stronger in the wake of the COVID-19 outbreak.    

“The pandemic has many persons decamping from the big city to outlying areas in search of housing types that are more suburban in nature, which closely mirrors what built-for-rent communities are delivering,” said Scott Adams, senior principal at Bassenian Lagoni.  This includes millennials who want low- to no-maintenance homes, as well as baby boomers who may be eyeing retirement and want a “touch base place” to do more traveling post-pandemic, says NAHB.

Moreover, as new homebuyers approach child-rearing age – or have already arrived there – younger couples want room for the little ones, here or on the way.  They also see the superior economic benefits of owning rather renting an apartment in denser, downtown neighborhoods.

Also, suburban developments often offer more space for a lower price.  With so many people acclimatized to working from home, the extra commute time is no longer a barrier to suburban homeownership.

NAHB, as well, notes the rise over last year’s activity is mainly due to a piqued interest among millennials.  An estimated 13 percent of Americans are interested in buying a home this year, a long-awaited increase over last year.  Nearly a quarter of the demand is coming from millennials. 

Meanwhile, homebuying remains a priority for other younger groups.  Generation Xers made up 14 percent of new homebuyers, as did those hailing from Generation Z.

While this is good news, it’s much gloomier nationwide.  Overall, the homeownership rate in the United States (U.S.) is still just over 65 percent – well below its high point of nearly 70 percent in 2004.  Here in California it’s much worse.  At a dismal 54.8 percent, California has the second-lowest rate of homeownership – about only one percent higher than last-place New York.

While the youth of this nation, and the state, represent the hope of our future, what the future in homebuying portends is pretty grim.