SEATTLE, Nov. 23, 2020 /PRNewswire/ -- The rapid rise in
pandemic-driven telework could make first-time homeownership most
broadly accessible to black renters compared to other renters,
based on factors including income, the makeup of local industries,
geography and more, a new Zillow® analysis suggests.
Zillow research found that, of the nearly 2 million U.S. renters
who are able to take advantage of heightened telework options and
could afford monthly payments on homes in less-expensive areas
outside of their current metros, Black renters benefit far more
than other renters . In large metro areas where typical starter
home values are higher than they are nationally, Black renters are
29% more likely than other renters to be able to buy their first
home in a less expensive area because of the opportunity to work
from home permanently.1
Black renters have the most opportunity due to their likelihood
of working in more "remotable" industries, like educational
services and public administration, combined with having relatively
low income levels, pricing them out of where they currently
live, but high enough to potentially afford a home in a
less-expensive metro.
"Teleworking has opened up more options for my family.
We've made a life here in Maryland, but with two small children being
able to purchase a home back in Louisiana and be closer to my parents and our
extended family is just what we need," says Jonathon Holloway, a federal employee and
Maryland renter who recently made
an offer on a home in Louisiana. "With everything that has
happened this year, it makes you stop and realize what is really
important. And for us, that's family. Without the ability to
telework, we might not have been able to make this transition."
That opportunity is highly dependent on each specific market. In
Baltimore, for example, it is more
likely for Black households making $30,000 to $40,000
to have primary earners in health care administration and office
work, which is highly "remotable", while in Phoenix it is more common that someone in this
bracket would be in travel, hospitality and accommodation, or food
service, which is not.
The black and white homeownership gap remains as wide today as
it was at the dawn of the 20th century. Nearly 75% of white
households own their homes, compared with just 44% of Black
households. While remote work can open up opportunities to buy a
home in more affordable locations, it doesn't address the root of
the various affordability issues for people of color. This means,
for some people, achieving homeownership in this way will be a
tradeoff against living some place they would prefer. For others,
though, it could mean the sudden ability to move to an area they
would have preferred in the first place. This analysis shows that
Black renters are most likely to face this tradeoff decision.
"Although it's well-known that the pandemic has been
disproportionately harmful to Black communities, the rapid shift to
remote work could make homeownership more broadly accessible," said
Zillow economist Treh Manhertz. "It's a rare opportunity for those
in a position to take advantage of remote work. Unfortunately, this
shift will not be a major factor in closing the homeownership gap
nationally. The larger-scale solution must be to create options for
affordable homeownership locally. Moving away may be a newer option
for some, but it shouldn't be the only option available to achieve
homeownership."
Although white and Asian renters are much more likely to work in
more "remotable" industries, such as finance, insurance and tech,
their incomes more often allow them to buy homes in their current
metro areas.
At the national level, teleworking could open homeownership to
4.5% of all renter households, including 9% of Asian renters,
3.7% of Black renters, 5% of Latinx renters, and 4.1% of white
renters. While the national numbers show the share of households
with "remotable" work who could potentially afford a home in
another metro area, they don't paint the entire picture by
considering how effects will impact each community differently
based on variations in home prices, incomes, and industries
geographically.
A starter home in the U.S. is around $132,000, which at recent low rates and a 20%
down payment translates to estimated monthly payments of about
$725, about 30% of income for a
household earning $29,500 per year.
Black and LatinX Americans are at the bottom of the ladder when it
comes to wages, but for homeownership, the benefits
of telework are larger at lower income levels. Job
concentration has driven home values especially high in the largest
metros and many households have been priced out. Telework has the
potential to offer more flexibility and shift the affordability
equation just enough for many households to get a foothold in
homeownership.
Share of Rental Households Able to Telework to Buy a Home
Elsewhere
Metropolitan
Area
(Table ordered by
market size)
|
Share
Overall
|
Share of White
Households
|
Share of Black
Households
|
Share of Latinx
Households
|
Share of Asian
Households
|
United
States
|
4.5%
|
4.1%
|
3.7%
|
5.0%
|
9.0%
|
New York,
NY
|
7.4%
|
7.4%
|
8.9%
|
6.2%
|
7.5%
|
Los Angeles-Long
Beach-Anaheim, CA
|
17.2%
|
20.0%
|
19.5%
|
13.2%
|
19.8%
|
Chicago,
IL
|
1.1%
|
1.3%
|
1.2%
|
0.8%
|
0.5%
|
Dallas-Fort Worth,
TX
|
3.2%
|
2.5%
|
5.5%
|
2.4%
|
1.7%
|
Philadelphia,
PA
|
1.2%
|
1.2%
|
1.6%
|
0.7%
|
1.3%
|
Houston,
TX
|
1.6%
|
1.7%
|
2.5%
|
0.9%
|
1.2%
|
Washington,
DC
|
8.6%
|
8.3%
|
10.0%
|
6.7%
|
7.0%
|
Miami-Fort
Lauderdale, FL
|
3.1%
|
3.2%
|
3.7%
|
2.7%
|
3.0%
|
Atlanta,
GA
|
2.2%
|
2.1%
|
2.5%
|
2.0%
|
1.4%
|
Boston, MA
|
10.3%
|
10.6%
|
12.5%
|
7.3%
|
11.1%
|
San Francisco,
CA
|
22.0%
|
24.5%
|
18.0%
|
16.8%
|
22.8%
|
Detroit,
MI
|
0.0%
|
NA
|
NA
|
NA
|
|
Riverside,
CA
|
6.4%
|
5.9%
|
7.4%
|
6.0%
|
7.5%
|
Phoenix,
AZ
|
7.1%
|
7.0%
|
8.9%
|
6.0%
|
7.0%
|
Seattle,
WA
|
12.5%
|
12.9%
|
14.3%
|
10.5%
|
10.6%
|
Minneapolis-St Paul,
MN
|
6.6%
|
6.3%
|
6.5%
|
10.1%
|
4.7%
|
San Diego,
CA
|
15.4%
|
16.3%
|
21.3%
|
12.8%
|
14.5%
|
St. Louis,
MO
|
0.0%
|
NA
|
NA
|
NA
|
|
Tampa, FL
|
2.2%
|
2.1%
|
1.9%
|
2.9%
|
0.0%
|
Baltimore,
MD
|
2.5%
|
2.2%
|
3.1%
|
0.5%
|
2.0%
|
Denver, CO
|
14.6%
|
15.9%
|
18.3%
|
10.4%
|
12.7%
|
Pittsburgh,
PA
|
0.0%
|
NA
|
NA
|
NA
|
|
Portland,
OR
|
11.7%
|
12.1%
|
7.5%
|
10.7%
|
10.3%
|
Charlotte,
NC
|
1.6%
|
1.2%
|
2.4%
|
0.9%
|
1.4%
|
Sacramento,
CA
|
10.5%
|
11.6%
|
9.5%
|
8.6%
|
8.2%
|
San Antonio,
TX
|
1.0%
|
0.7%
|
2.7%
|
0.9%
|
0.6%
|
Orlando,
FL
|
3.5%
|
3.4%
|
3.6%
|
3.4%
|
1.7%
|
Cincinnati,
OH
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Cleveland,
OH
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Kansas City,
MO
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Las Vegas,
NV
|
5.3%
|
5.8%
|
4.7%
|
4.6%
|
5.3%
|
Columbus,
OH
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Indianapolis,
IN
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
San Jose,
CA
|
25.2%
|
26.3%
|
27.1%
|
18.7%
|
27.8%
|
Austin, TX
|
9.5%
|
10.4%
|
10.8%
|
7.6%
|
7.2%
|
Virginia Beach,
VA
|
2.9%
|
2.8%
|
2.8%
|
3.0%
|
0.7%
|
Nashville,
TN
|
5.4%
|
4.9%
|
8.1%
|
1.5%
|
8.6%
|
Providence,
RI
|
5.5%
|
5.6%
|
5.1%
|
5.8%
|
5.7%
|
Milwaukee,
WI
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Jacksonville,
FL
|
1.2%
|
0.7%
|
2.3%
|
0.7%
|
0.0%
|
Memphis,
TN
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Oklahoma City,
OK
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Louisville-Jefferson
County, KY
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Hartford,
CT
|
1.5%
|
1.4%
|
2.2%
|
1.5%
|
1.4%
|
Richmond,
VA
|
2.2%
|
2.1%
|
2.7%
|
1.1%
|
2.2%
|
New Orleans,
LA
|
0.8%
|
0.6%
|
1.1%
|
0.0%
|
0.1%
|
Buffalo,
NY
|
0.0%
|
NA
|
NA
|
NA
|
|
Raleigh,
NC
|
5.9%
|
5.6%
|
7.1%
|
3.3%
|
4.6%
|
Birmingham,
AL
|
0.0%
|
NA
|
NA
|
NA
|
NA
|
Salt Lake City,
UT
|
14.1%
|
15.8%
|
6.1%
|
12.1%
|
7.5%
|
|
* In
the metros where the total share of households that can telework to
buy is 0%, starter home values are less expensive than the national
average.
|
Editor's note: For comparability to
previous Zillow analysis ,this analysis includes July 2020 Zillow typical home value data, as well
as 2018 Census Bureau data.
About Zillow Group
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1 Odds ratio is taken with each group
compared in turn to the group of all other renters.
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SOURCE Zillow