As more companies offer remote working for employees, Americans who rent in expensive subway areas could be given the option to buy starter homes in more affordable parts of the country, according to a new analysis.
A recent report by Zillow found that nearly two million tenant households could buy starter homes if they were allowed to telework. The option to work remotely would allow many of these tenants to move out of expensive coastal markets, where property is outside their price range, and to move to other places where a starter home is cheaper.
The typical starter house is valued at $ 131,740, according to Zillow, but that price can be significantly higher in 37 of the 50 largest metro areas in the country. "As a result, many households are unable to own a modest home while they are commuting to a physical workplace," wrote Zillow data analyst Treh Manhertz.
The Zillow analysis looked at tenant households who could afford monthly payments for a typical starter home, but not in their subway area. The analysts then determined the ability of these households to telework based on income, the job industry and the job itself.
The analysis found that half of the 1.92 million renters who could buy homes while teleworking are millennials.
The analysis takes this into account almost half– 43.6% – of American workers are in jobs where they could theoretically telework. "In the past six months, many companies have found that their employees can function better remotely than originally thought," wrote Manhertz. "As teleworking becomes more of the norm and businesses allow it to do so where possible, it could give millions of Americans more choices about their homes and household finances."
Zillow noted that San Francisco Bay – known to be more expensive than other metropolitan areas – has the most tenants that starter homes in other parts of the country could afford. Twenty-two percent of San Francisco renters could do so if they were allowed to telework, as did 25.5 percent of San Jose renters.
However, not all Americans would have to leave their metropolitan areas to buy a starter home: the analysis shows that these homes in 13 of the country's largest subway areas are actually below the average price of a typical starter home.
The report also notes that some Americans may not want to leave subway areas, even if it means they can buy a home, indicating the benefits of renting in a big city like New York rather than quieter ones To live in suburbs.