As the housing market continues to contend with shifting consumer behaviors around how to live in a post-pandemic world, a combination of inflation, price appreciation and inventory scarcity has persuaded some would-be buyers in urban areas to remain renters. With primary homes becoming out of reach for many first-time buyers in cities like San Francisco, Los Angeles, and New York, the relative value found in suburban and rural markets makes it more compelling for some to buy their “second home, first.”
Continued work-from-home flexibility is fueling this trend, and the affordability contrast between living in and out of the city is stark. The result? Rental market dynamics are becoming increasingly competitive in many cities, with long lines for showings, offers over asking, and other behaviors that mirror 2021 purchase market conditions. With homeownership functioning as a valuable inflationary hedge, expect to see this trend continue, particularly as more companies, such as Pacaso and Summer, emerge to facilitate the consumer journey into second-home ownership.