Affordability Still the Top Concern for Homebuyers

NEW YORK – In many expensive U.S. markets, home value growth is slowest in areas nearest to job centers, while the opposite is happening in markets where homes near downtown are typically more affordable than elsewhere in the metro.

A 10-minute commute in New York is now $73,673 cheaper than it was in 2019, while a Detroit home with a 10-minute commute is $101,228 more expensive.

The trends reflect Americans’ desire for larger, more-affordable homes during the pandemic.

As remote work became more commonplace during the pandemic, Americans shifted their priorities away from quick office access and towards home affordability. Home values within a short commute of the country’s biggest downtown job centers remain lofty, but are also growing more slowly than those farther out – in many areas, but not all.

The American workplace has been permanently changed by the COVID pandemic. Many employees are now untethered from physical office locations, and buying a home close to a physical office location is lower on the priority list. And while a short commute used to come with a hefty price tag in some markets, the tides are beginning to shift. Connecting home values to commute time data from HERE Technologies, Zillow found that there were two seemingly separate events happening across different types of markets.

In more-expensive metros, proximity to the downtown center is being traded in for longer commute times, and in less-expensive metros, shorter commutes to city cores are gaining value.

In many high-priced markets, home values farther away from job centers rose faster than those closer to downtown as more people take advantage of flexible working conditions and the five day/week commute becomes less essential. In less-expensive metros, short commutes to job centers gained traction, and homes in a location boasting quick access to downtown increased in value at higher rates.

While these two events seem to be in opposition, they are really highlighting the same shift. People are taking advantage of flexible working opportunities and updated expectations on what they need in a home, and are moving towards more affordable places. In markets including San Francisco and New York, it’s cheaper to move farther away from downtown and settle for a longer commute. In Baltimore and Detroit, homes are often less expensive closer to the core.

If this data shows us anything, it’s that when given an opportunity, people will move where it is affordable for them to do so.

Seeking affordability

The shift is dramatic in many expensive, dense, coastal markets, many of which are notorious for their high prices. Home values within a 20-minute commute range to central business districts in places including New York, Boston, San Francisco and Washington, D.C., grew the least between April 2019 and April 2021, and even fell in San Francisco, New York and Boston. In Seattle, homes in the 50-60 minute commute range to downtown grew by 39.6% over the two years analyzed, compared to just 12.2% for homes just a 10-minute commute from the downtown center.

In New York, homes even farther from the Big Apple’s core – those 80-90 minutes away – rose in value the most, up 25.7% from 2019. On the flip side, the cost of a New York-area home boasting a 10-minute commute fell by $73,673 between 2019 and 2021, and the typical home in the 10-20 minute commute range fell in value by almost 10% over the same timeframe.

But in less-pricey markets including Baltimore, Cleveland, Detroit and Indianapolis, homes with a 20-minute commute distance to downtown grew in value the most. In many cases, these markets are more sprawling and decentralized, and the home values in the core are typically lower than in the suburbs. Lower urban home values may also be a reminder of the lasting impacts of historical policies like redlining that depressed home values in many city cores for years. But as this data shows, there is a new wave of urban revival coming to these city centers.

In Detroit, typical home values within a 10-minute commute of the main job center jumped more than $100,000 since 2019 (from $124,467 to $225,695) showing demand for a more central location is picking up. And the typical home located within a 10-minute commute to downtown Cleveland now costs 72.5% more than it did in 2019.

The flexibility that comes with remote work might be causing some of this movement in these markets, but this trend was already in swing well before the pandemic. As early as 2017, we observed higher rates of reverse commuters in these markets – people living in urban areas and commuting to suburban and rural areas – based on the relative affordability of these urban centers to the surrounding suburbs. So, it makes sense that even without a pull to the job center, given more opportunity in the last year to partake in the great reshuffling, people are choosing to move back to the urban core.

Name of the game

Affordability is the name of the game as Americans continue to re-evaluate their housing priorities and preferences. In many cases, affordability is doubly desirable when paired with more space, whether that’s outdoor space or an extra bedroom to turn into a home office. In expensive, dense markets, that usually means a home farther out from the downtown core, which is more palatable when you don’t need to commute every day, if at all. In more sprawling metros, buyers are flocking to less expensive downtown cores, bringing a renewed interest to these city centers.

But even with record levels of appreciation, historically low mortgage interest rates have helped keep monthly payments low enough to allow many to move, both to new locations and to new types of homes to better fit lifestyle choices. We have seen how many have moved between metros – often favoring sunbelt markets including Phoenix and Austin – but this data shows us how people are moving within metros as well, favoring more cost-effective locations, regardless of their proximity to the office.


Using ZIP code-level data from the 2016 County Business Patterns dataset from the US Census Bureau and the number of inbound trips per square mile for a morning commute from HERE Technologies, we identified ZIP codes that function as job centers in the nation’s 35 largest metros using the number of employees per square mile. Using the centroids of those ZIP codes as our destination location for commute times, we determined geographic areas that fell within each commute time band, from less than 10 minutes to 90 minutes, via isolines provided by HERE technologies. We then combined Zillow’s home value estimates (Zestimates) with these geographic areas and pulled the median home value for each commute time band. The home values we used were obtained May 1, 2021, and compared to home values from May 1, 2019, to calculate the percent growth over the two-year period. Commute times were based on 8AM local time commutes on Monday, May 24, 2021.

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