WASHINGTON—A new study shows that consumers continue to exit cities in favor of country homes.
The report from Fannie Mae’s Economic & Strategic Research (ESR) Group explores the trends driving homebuying demand in rural communities.
“The confluence of increased demand for space, opportunities to work remotely, and historically low interest rates during the COVID-19 pandemic had a substantial effect on the geography of housing demand. While other research has focused on where households have moved within metropolitan areas, rural areas have received less attention — even though application activity for housing in rural and non-metropolitan communities surged since the start of the pandemic and house price appreciation has been greater in these less-dense areas,” Fannie Mae said.
Among the findings:
- Mortgage applications in rural communities surged during the pandemic and remain above pre-pandemic averages, despite the relatively high-interest-rate environment slowing demand in more urban areas
- Homebuyers from outside the region are driving the rise in rural housing demand — with second-home and investment purchasers making up a large share early in the pandemic, followed by buyers planning to move in from outside the region
- Demand has increased across all types of rural communities, with resort communities seeing early spikes that have since tapered, and institution-rich hubs seeing sustained demand