The old city-versus-suburb debate is getting a new twist. As remote work becomes more common and priorities shift toward space, affordability, and quality of life, more Americans are rethinking where they want to live. Some are trading high-rise living for bigger backyards, while others return to cities drawn by walkability, shorter commutes, or vibrant cultural life. These shifting preferences are reshaping housing demand, redrawing development patterns, and raising new questions about the future of American neighborhoods.
Urban vs. Suburban: A Changing Landscape
In the mid-20th century, many American families moved to newly built suburbs outside city centers, seeking more space and quiet neighborhoods. By the 2000s, some big cities saw a revival as people (especially young professionals) moved downtown for jobs and entertainment. Urban living became popular again in places with revitalized downtowns and new apartment buildings.
The COVID-19 pandemic in 2020 brought a sudden turn. Health concerns and lockdowns made crowded cities less appealing for a time, and remote work became common. Many people left dense cities in search of more room, causing a surge of interest in suburban and even rural homes. In 2020 alone, about 4.9 million people moved out of major cities to suburbs or rural areas. This “urban exodus” was driven by the desire for extra space (like a home office or a backyard) and the ability to work from home. As a result, suburban housing markets heated up quickly.
The Suburban Price Boom
During that period, home prices and rents in the suburbs jumped faster than in urban cores. From March 2020 to early 2023, suburban rents climbed 27%, compared to a 20% increase in urban areas. This was a historic flip: usually city rents rose faster, but now suburban rents outpaced them. By 2022 the typical suburban rent was only about 5.8% cheaper than a similar rent in the city, whereas before the pandemic it was 12% cheaper.
Home purchase prices showed a similar pattern. In 2021–2022, suburban home values appreciated more quickly than urban home values, reversing the usual trend. One analysis found that over the year ending in early 2022, the typical suburban home gained about $66,500 in value versus $61,700 for a typical urban home. Both went up, but suburban prices rose a bit more, reflecting fierce competition for houses outside city centers.
Urban Rebound
However, these trends are not static. By 2023 and 2024, the housing market began to adjust. As pandemic fears eased, cities started to regain some residents. In fact, the share of homebuyers purchasing in urban or central city locations rose to 16% in 2023, the highest since 2014.
Real estate data show that fewer people are now leaving the big cities than during the height of the pandemic. For example, New York City’s population loss slowed significantly in 2022–2023 compared to 2020–2021. Los Angeles also saw a smaller outflow of residents in 2023 than the year before. This suggests that the “urban exodus” has cooled, and some people have returned to city life or are at least staying put.
At the same time, suburbs remain very popular, and overall more Americans still move to suburbs than to downtowns. Today roughly 45% of homebuyers are choosing suburban homes, compared to about 16% choosing urban city homes. The majority of U.S. home purchases still happen in suburbs, but cities are no longer being abandoned – they are finding a new equilibrium with suburbs as both types of areas adapt.
Remote Work and Housing Demand
One of the biggest drivers of recent housing trends is the remote work revolution. Before 2020, only a small fraction of Americans worked from home regularly. In 2019, just 6–7% of U.S. workers primarily worked from home. Commuting to an office was a normal part of life for most people.
But the pandemic forced a massive experiment in working from home, and it largely succeeded. By mid-2023, about 28% of paid workdays were being done from home – four times higher than before the pandemic. Surveys show that most people with remote-capable jobs want to keep working remotely at least part of the week. About 60% of these workers prefer a hybrid schedule (some days at home, some in office), and only a small minority want to be on-site every day. This is a huge shift in workplace culture, and it has real effects on housing choices.
The Freedom to Live Farther From Work
With the freedom of remote work, many families realized they could live farther from their jobs and still keep those jobs. If you only need to go into the city office once a week – or not at all – why not get more space or a lower-cost house out in the suburbs or beyond?
Data confirms that people took advantage of this freedom. The median distance that recent home buyers moved shot up during the pandemic. In 2021, the typical home buyer moved 50 miles from their previous home – a record high distance, and more than three times the usual range. (From 2018 to 2021, the median move distance had been steady at about 15 miles.) This means lots of people relocated much farther away, often from expensive cities to more affordable regions where they could work remotely.
Some even moved clear across the country. These far moves gave rise to so-called “Zoom towns” – smaller cities or vacation towns that saw an influx of remote workers bringing big-city salaries. For the first time, living 100 miles from your company’s office was perfectly feasible for many.
Settling Into New Patterns
Even though some workers have since returned to offices, moving distances remain longer than before. In 2023, the median distance between the home buyers’ old and new homes was 20 miles, down from that peak of 50 miles but still higher than the ~15 miles typical pre-pandemic.
One big reason is that commuting every day is no longer the norm for millions. The importance of being close to the workplace has dropped. In surveys, only 34% of recent home buyers said that convenience to their job was a very important factor in choosing a neighborhood – this is down from 52% who said so in 2014. Proximity to work has become less crucial than it was, reflecting the new reality of hybrid and remote schedules.
Rise of the Exurbs
Government population data underscores how remote work enabled growth in far-flung areas. According to the U.S. Census Bureau, exurbs – towns 30, 40, even 60+ miles from big-city downtowns – have recently become some of the fastest-growing places in the country.
Before the pandemic, most fast-growing spots were closer to city centers or in nearer suburbs. But in 2022–2023, more of the fastest-growing communities were those “outer edge” suburbs, while fewer were inner-ring suburbs. A Census demographer attributed this to remote work and high urban housing costs: with more people able to work from home, many chose to live further out where housing is cheaper.
In short, work-from-home flexibility expanded the geographic choices for homeowners. Someone working a tech job in San Francisco, for example, might decide to move to a quieter (and more affordable) town 50 miles away and only commute occasionally. Thousands of people have done exactly that.
Return to Office Mandates
That said, not everyone can work remotely, and some companies are now requiring more office attendance. These “return-to-office” policies have slightly cooled the remote work boom. Some folks who moved deep into the suburbs or to small towns have had to reconsider if their employer insists on in-person days.
In 2024, Redfin reported that more companies calling workers back contributed to fewer people moving into far-off Sun Belt locations. A portion of those who left New York or San Francisco for, say, rural Idaho are now returning to big cities because their jobs demand it.
Even so, the overall consensus is that remote and hybrid work will remain far more common than before. Many experts believe that the future will be flexible – with a large share of the workforce continuing to work remotely at least part-time, allowing many families to live in suburbs or regions that were once out of reach.
In fact, economists project that the share of work done from home may even tick up again as technology improves (think better video conferencing, virtual reality meetings, etc.). For housing, this means ongoing strong demand in suburban and exurban areas, since those no longer automatically lose out to city centers when it comes to job access.
Transportation Infrastructure: Connecting City and Suburb
Transportation has always been a key factor in urban vs. suburban living. The growth of American suburbs in the 1950s and 1960s was fueled by new highways and the popularity of cars. If people can drive to work on a highway in 30 minutes, they might choose a house with a yard outside the city rather than an apartment downtown.
Transportation infrastructure – roads, public transit, trains – determines how easily people can commute and get around. Historically, cities had the advantage of shorter commutes and public transportation options (subways, buses), while suburban residents relied more on cars and highways.
Remote Work Changes Commuting Patterns
However, the landscape is changing here as well. As noted, remote work reduces the need for daily commuting, lessening the impact of transportation limits. Many workers are now commuting only a few days per week or not at all. This means some families tolerate living farther from the city, since they don’t have to drive that distance every single day.
One survey found that remote workers saved an average of 55–72 minutes per day by not commuting – valuable time that people have reallocated to family or personal activities. When commutes are infrequent, factors like the length of the drive or the availability of a train are slightly less critical in the home decision.
Transportation Still Matters
That said, transportation still matters a great deal, especially as some normalcy returns. Cities with good public transit may attract people who are tired of long car commutes or who are called back to the office. On the flip side, heavy traffic or poor transit can push people toward moving away.
We’re also seeing transportation considerations play into which suburbs are hottest. Inner-ring suburbs that have multiple highways or commuter rail lines can be more desirable because they give easy access to both urban jobs and suburban amenities. In contrast, a far suburb with only one road in and out might struggle if gasoline prices spike or if people must commute more often.
Return to Office Effect on Housing
Recently, with some workers back in offices at least part-time, housing demand has ticked up in areas closer to job centers again. Real estate analysts observed that in 2024, return-to-office mandates led to rising homebuyer interest in neighborhoods near downtown employment hubs in certain cities.
Essentially, a minor reversal is happening: after two years of people spreading out, some are now coming closer to the city on the days they need to be in-office. In places like New York, Miami, and San Francisco, there are reports of increased demand for housing in commutable distances to the city center as companies call workers back.
Transportation is the link here – people are balancing the benefit of remote work with the reality of commuting when required. We can expect that infrastructure quality (roads, trains, buses) will continue to influence housing demand. Efficient transport can extend the reach of suburbs, while also keeping cities connected and accessible, thereby maintaining urban demand.
Climate Risk and Homebuyer Choices
Climate and the environment are becoming increasingly important in real estate decisions. In the past, people might not have considered climate risks – like hurricanes, wildfires, floods, or extreme heat – when choosing where to live. But with climate change making natural disasters more frequent and severe, homebuyers are starting to factor in these risks.
Sun Belt Migration Despite Risks
Ironically, during the initial pandemic relocation wave, many Americans moved into areas that actually have higher climate risks. Popular Sun Belt destinations like Florida, Texas, and Arizona offer affordable housing and warm weather, but some of those same areas face serious hazards (hurricanes in Florida, wildfires and heat in parts of Texas and the Southwest).
In 2023, more people moved into U.S. counties with high wildfire risk than moved out, resulting in a net inflow of about 63,000 residents into high-fire-risk counties. Similarly, high flood-risk counties (many along coasts or rivers) saw a net gain of around 16,000 residents in 2023.
These trends were largely driven by migration to states like Texas and Florida – places that attract newcomers with low taxes, relatively affordable homes, and job growth. In other words, for many movers, the economic benefits still outweighed the abstract risk of a future disaster. Housing demand has been strong in states like Florida despite the well-known hurricane danger each year.
Growing Climate Awareness
However, there are signs that climate risk is starting to influence decisions more strongly than before. In California, which has suffered devastating wildfires, some previously fast-growing fire-prone areas saw more people leave than move in last year – a reversal from prior trends. And in Florida’s flood zones, while still net positive, the inflow of people has slowed compared to the past. This suggests that some buyers are becoming more cautious about climate dangers.
Indeed, the cost of homeowners’ insurance in disaster-prone areas has been skyrocketing, which directly affects housing affordability. By 2023, homeowners in regions with high natural disaster risk (like coastal counties in the Southeast or fire-prone areas in the West) were paying about $500 more per year for insurance than those in low-risk areas – a gap that has widened from a $300 difference a few years earlier.
Nationwide, average home insurance premiums jumped over 30% from 2020 to 2023 (about 13% above inflation). In states like Florida, some major insurers have pulled back due to huge hurricane-related losses, leaving homeowners to either pay much higher rates or rely on state-backed insurance pools. These rising costs are effectively increasing the “price” of living in high-risk locations, which can dampen demand.
Rise of Climate Havens
On the other hand, areas with lower climate risks – sometimes called “climate havens” – could see increased demand in the future. Places in the Midwest and parts of the Northeast that are less prone to wildfires, hurricanes, or sea-level rise may attract more people looking for long-term safety.
We’re already seeing some hints of this: relatively affordable Midwestern metros like Minneapolis and Indianapolis saw migration increases in 2024, as some movers look for safer, budget-friendly alternatives to the Sun Belt. These cities offer a lower risk of large-scale natural disasters and have plenty of housing at lower prices, which is appealing to families weighing all factors.
It’s important to note that climate risk hasn’t overtaken traditional factors like jobs and affordability yet in most people’s housing choices. Many Americans are still moving to places like Phoenix, Houston, or coastal Florida because of jobs, lifestyle, or cost, even though those areas face climate-related challenges. But climate considerations are expected to grow in importance.
Current Trends in Housing Demand
Bringing these factors together, what is the current state of urban vs. suburban demand in the U.S. housing market? As of 2024-2025, several clear trends have emerged:
Suburban Strength Continues
Suburbs remain extremely popular, especially for families seeking more space. A majority of homebuyers (around 45%) are buying in suburbs or subdivisions, and about another 23% in small towns, compared to roughly 16% in urban city centers. This means the typical American buyer today is still more likely to choose a suburban home than a city condo.
The pandemic jump-started a suburban surge that has not fully reversed. Many suburbs around the country saw home prices and rents rise sharply in the past few years due to high demand and limited inventory. For example, suburban home values in many metro areas rose by double digits in 2021 and 2022, and suburban rents likewise climbed (often outpacing urban rent gains).
Urban Recovery
Urban areas have bounced back to an extent. While the urban share of buyers (16%) is still lower than the suburban share, it’s higher than it was during the worst of the pandemic period. In 2020–2021, urban demand plummeted – some surveys showed only about 10% of buyers were choosing city homes at that time. Now that figure has recovered, indicating that city living is regaining appeal for some segments (young professionals, those who missed cultural amenities, etc.).
Cities like Boston, Atlanta, Detroit, and Washington D.C. have actually turned their population declines into modest gains recently. Downtown life is reviving: restaurants, theaters, and events are back, drawing people who want an urban lifestyle. However, not all cities are equal – a few large cities (like New York, San Francisco) are still slightly shrinking in population, though even they have slowed their losses.
On the rental side, as offices and colleges reopened, urban apartment demand picked up; in many cities, rents are back above pre-pandemic levels. The “ghost town” fears for big cities have not materialized overall, though office districts on weekdays are quieter due to hybrid work.
Exurban Growth
Exurbs and outer suburbs are some of the fastest-growing places. Small cities and towns on the far edges of metropolitan areas (commonly 30+ miles from the urban core) are booming in population. Examples include communities on the outskirts of Austin, Phoenix, Nashville, and other Sun Belt metros that offer cheaper new housing.
Many of the fastest-growing incorporated places in 2022–2023 were these distant suburbs. This trend reflects both remote work and ongoing high housing costs in established suburbs closer to the city. Essentially, when inner suburbs became too pricey or competitive, people who still wanted a house with a yard kept moving further out until they found something affordable.
Regional Migration Shifts
Regional migration continues to favor the South and West, but with a twist. Over the past decade, a big story was the migration from expensive Northeast and West Coast cities to more affordable Sun Belt areas (Florida, Texas, Georgia, Arizona, etc.). That continued through the pandemic: for instance, Florida and Texas gained a large number of residents during 2020–2022, fueling housing demand there.
Recently though, the pace of people moving to those hot states has slowed down. In 2024, Redfin found that inbound migration to Florida and Texas was much lower than in the prior year. Tampa, FL’s net influx fell from 35,000 people in 2023 to about 10,000 in 2024. Dallas saw a similar drop (from 35,000 to 13,000 net gain). And some Sun Belt metros like Atlanta even saw a small net outflow of people in 2024 (more people moving out than in).
This is a notable change – it suggests that the “boom towns” of the past few years are cooling off a bit. Reasons include higher housing costs now in those areas (prices have risen rapidly, pricing some people out) and concerns about natural disasters. Meanwhile, fewer people are leaving the big coastal cities than before.
Housing Affordability Challenges
Housing supply and affordability issues persist everywhere. A major factor affecting demand (urban or suburban) is simply the availability of homes people can afford. The U.S. has had a housing shortage for years, and it became acute after 2020 due to construction lags and surging demand.
By 2023–2024, high mortgage rates (around 7%) combined with high prices have made it tough for buyers, especially first-timers, in both cities and suburbs. This has cooled the market overall – fewer sales are happening because people are staying put if they have a low mortgage rate, and buyers face affordability walls. Home sales volumes dropped in 2023 to some of the lowest in a decade.
In suburbs, this meant fewer listings and continued competition for whatever starter homes existed. In cities, it meant some renters delayed buying condos and kept renting. So current demand is somewhat tempered by economic conditions: even if someone wants to move to a suburb, they might not if they can’t swing the monthly payment on those higher prices and interest rates.
Looking Ahead: What the Future Holds
What do experts predict for the future of urban vs. suburban demand in the United States? While nobody has a crystal ball, current evidence and trends suggest a few likely directions in the coming years:
Remote Work Permanence
Remote work is here to stay. The consensus among economists and workplace experts is that we will not return to the 5-day-a-week office norm of the past for many jobs. Companies have seen that productivity can remain high with remote teams, and employees strongly desire flexibility. Forecasts indicate that the share of work done from home may even rise further as technology improves.
This means that suburban and rural living will continue to appeal to a large segment of workers. Demand for homes with extra rooms (for offices), bigger yards, and peaceful neighborhoods could stay elevated. We may continue to see growth in smaller cities and outer suburbs as people realize they can live anywhere with a good internet connection.
Urban Adaptation
Cities will reinvent themselves. Many large cities are actively planning for a future with more hybrid workers and lingering vacancies in office buildings. A big trend to watch is the conversion of office space to residential units in downtown cores. Cities like Boston and Minneapolis have started offering incentives to convert empty offices into apartments or condos.
If these initiatives take off, we could see downtown areas becoming more residential and mixed-use, which might attract people to live in city centers who previously wouldn’t (if, for example, those conversions create more affordable housing options in the heart of the city).
The goal for cities is to remain vibrant places to live, not just to work. Expect to see urban areas doubling down on quality-of-life improvements – parks, cultural events, pedestrian zones – to draw residents. We might end up with cities that feel a bit more like suburbs (quieter, more residential) in some sections, and suburbs that feel a bit more like mini-cities (with their own work hubs and entertainment). This blending could equalize demand.
Climate Considerations Will Grow
Climate considerations will intensify. Unfortunately, as climate change progresses, certain areas will face more challenges. This could lead to shifts in where people want to live. For example, if insurance in coastal Florida becomes prohibitively expensive or if there are a couple of very bad hurricane seasons, we might see a more pronounced migration away from high-risk coastal zones to inland metros or to the Midwest.
The term “climate migration” is being used by experts to describe the potential relocation of populations due to climate impacts. While it’s early to say how big this will be, real estate analysts are monitoring things like property value declines in flood zones or difficulties in selling homes in fire-prone areas.
In the future we could see, for instance, higher demand for places like the Upper Midwest or New England, which have abundant water and less extreme heat, compared to some traditional retirement spots in the Southeast. Already, cities such as Buffalo, NY, and Duluth, MN have been mentioned as potential climate havens. Homebuyers of the future might routinely check climate risk scores of properties just as they check school ratings or commute times today.
Conclusion
The future of U.S. housing demand will not be a simple one-way story of either urban revival or suburban dominance. Both types of areas will evolve and attract people for different reasons.
Suburbs are expected to continue growing, particularly those that offer a good balance of space, community, and reasonable access to jobs (even if virtual). They will benefit from remote work trends and the desires of families for space and good schools.
Cities are not going anywhere, though – America’s great cities have faced crises before and adapted. We’re likely to see cities adapt by becoming more residential and improving livability, which could usher in a sort of urban renaissance 2.0 where downtowns are lively 24/7 communities, not just 9-5 business districts. Should that happen, demand for urban housing could surge again.
For the individual homebuyer or renter, the key takeaway is that you have more choices now. The pandemic broke the mold that you must live close to work or in a certain big city for your career. Many people can successfully live where they truly want – be it a country town, a sprawling suburb, or a dense city – and still connect to work and others digitally.
Some will choose the bright lights of the city, others the green lawns of the suburbs, and plenty will choose something in between. Real estate demand will follow these preferences, leading to a more distributed and dynamic market across the United States.
References
- Rents are falling more slowly in U.S. suburbs than in cities. Here’s why.
- Suburban homes gaining value faster than urban counterparts, Zillow finds
- Census shows big city population improvements, countering predictions of the ‘urban doom loop’
- Florida and Texas Are Gaining Residents at a Much Slower Rate Than They Used To, Eating Into Homebuyer Demand
- High work-from-home rates persist in 2023
- Global Indicator: Hybrid Work – Gallup
- NAR 2022 Profile of Home Buyers and Sellers
- More People Moved Farther Away From City Centers Since COVID-19
- Work From Home 2023: No Commute Makes You More Productive
- 50 Eye-Opening Remote Work Statistics for 2024
- Return-to-Office Mandates Are Driving up Home Prices in These 10 Cities
- Capitalizing On The Return To Office: Big City Real Estate Insights
- More People Are Moving In Than Out of Fire- and Flood-Prone America
- Map Shows Rising Home Insurance Costs by State as Climate Risks Grow
- How is climate change impacting home insurance markets?
- Redfin Reports Florida and Texas Are Gaining Residents at a Much Slower Rate Than They Used to
- Expert Voices 2024 | Remote Work: Its Impact on Cities | Penn IUR
