How Has Working from Home Affected the Housing Market?
During the COVID-19 outbreak in the early of 2020, many businesses across the United States closed, and millions of workers experienced working from home (WFH) out of necessity. This sudden and massive WFH experiment generated major lifestyle changes for workers, home owners, business owners and communities.
According to a new National Bureau of Economic Research working paper, Working from Home Around the World, which surveyed full-time workers in 27 countries in mid-2021 and early 2022, full WFH days averaged 1.5 days per week, with companies planning an average of 0.7 WFH days and workers desiring 1.7 WFH days. People placed a sizeable value on the option to WFH a few days per week because it saves time and costs, and provides more flexibility in time use over the day. Specifically, the study concluded that employees valued the option to WFH two to three days per week at 5% of pay, on average, with higher valuations for women, people living with children and those with longer commutes.
WFH has also enabled home buyers to relocate to low-density areas that have higher housing affordability conditions. The most recent analyses of NAHB's Home Building Geography Index (HBGI) showed that home building activities have shifted from higher density core areas to low-density and low-cost markets since the beginning of the COVID-19 pandemic. The analyses also indicated that the market share of single-family and multifamily construction in large metro core and inner suburbs dropped in the second quarter of 2022, compared to the fourth quarter of 2019 (pre-COVID).
Jing Fu, Ph.D., NAHB director of forecasting and analysis, provides more insights in this Eye on Housing post.