The typical U.S. suburban home gained $66,490 in value during the year ending March 2022, causing some buyers to instead search for housing in city centers, Zillow reports. Traditionally, suburban housing has been viewed by homebuyers as an affordable alternative to urban housing with the sacrifice of proximity to city centers, but as home values soar to new highs, that tradeoff is becoming less significant.
Demand for homes in suburban neighborhoods skyrocketed during the COVID-19 pandemic as remote work prompted the "Great Migration," causing many professionals to leave major cities to settle down in more spacious and affordable communities. Now, as home prices outside of metros creep to new highs, some buyers are returning to urban markets.
It’s also worth noting that while the typical urban home is worth more than the typical suburban home across the U.S., that is not necessarily the case in every market. And there are signs that demand may be shifting back in favor of urban homes. In each of the first three months of this year, the gap between annual home value growth in the suburbs and in urban areas has shrunk. Annual suburban home value growth outpaced urban home value growth by about $7,250 in December, but only by about $4,820 in March.