Workplace Flexibility and Housing Priorities: Fannie Mae’s Latest Research

Fannie Mae researchers conducted a survey of renters and owners to see how their work and housing preferences have changed since the start of the pandemic. 

To track those changes, they used questions from prior iterations of their National Housing Survey®, with some dating as far back as 2010. 

So, what did they find? 

1. Mixed reviews aside, remote and hybrid work are (probably) here to stay
2. Remote/hybrid employees are more willing to move farther away from the workplace
3. Affordability now ranks at #1 in importance for renters and #2 for homeowners
4. Suburbs are the preferred location when buying a new home–beating both urban and rural locations. 

Here’s how all that breaks down—and why it matters. 

Remote and hybrid work may be here to stay

First of all, the share of non-retired persons working either fully remotely or with a hybrid work schedule has remained fairly constant at 35% in Q1 2023—just a smidge below the 36% from Q3 2021. 

Even the mix of fully remote and hybrid employees held steady, with 14% indicating they’re fully remote and 21% reporting a hybrid work schedule—compared to 13% fully remote and 23% hybrid in 2021. Other studies have yielded similar results. 

So, despite alarming headlines on companies demanding their workers return to the office, the consistency of the percentages of people working from home—fully or partially—would argue that this trend is not being phased out across the board. 

It may, in fact, be here to stay, at least for those whose job performance hasn’t suffered as a result of switching to a fully remote or hybrid working model. 

There are benefits to both sides, after all. Employees save money on the cost of commuting, and they have access to a wider range of housing markets—especially if they work on a fully remote basis—making it easier to find affordable homes. Employers have access to a much larger pool of job candidates, just as employees are no longer limited to local job listings. 

Also, 22% of fully remote and hybrid employees said they’re willing to move farther away from their workplace in Q1 2023—a significant bump from the 14% who said as much in Q3 2021. 

That said, not all employers are on board with the idea of making remote or even hybrid work a permanent option. 

In last week’s episode of the Knowledge Brokers Podcast, Byron Lazine and Lisa Chinatti talked about the continued popularity of remote work in connection with some companies’ decision to bring employees back to the office even when remote work was a normalized option before the pandemic. 

The same is happening among brokerages. Whereas, with some, remote work had become an acceptable or even expected option, others are finding that agents learn more and perform better when they spend time every week, if not every day, at the office. 

Byron mentioned a conversation he’d had with someone at a recent party. She told him her husband had been working from home for the past eight years; they were remote workers five years before the pandemic even started. But starting today (the Tuesday after Labor Day), he’s having to go back to the office for the first time in eight-plus years. 

It’s become more normal than not for employers to tell their people, “You need to be in the office today,” especially if they’re noticing a significant loss in communication and productivity with their employees working remotely. 

So, while workplace flexibility can be a gift to both employers and the people they hire, much depends on the individuals involved—as well as on the type of work they do. 

For real estate agents—and any professional for whom in-person communication is an essential part of your work—physically showing up at an office every week (if not every day) gives you an edge you don’t have when you’re surrounded by the comforts of home. 

Because making phone calls and striking up conversations with people you don’t know is not (generally) a comfortable thing to do. 

Affordability tops the list of important factors when considering a move

Fannie Mae asked respondents about the factors they consider most important when shopping for their next home. And this year, affordability made it to the top of the list, with 36% ranking it as number one. 

That’s a significant 16% increase since 2014, when 49% ranked the neighborhood as their most important consideration. By 2023, that 49% had dropped to 33%. 

While affordability ranked high for over a third of overall respondents, its growth in importance was most obvious among renters. Nearly half (46%) ranked affordability as their most important consideration when shopping for a home in Q1 2023—more than double the 21% in Q4 2014. 

For context, in 2014, 45% of renters ranked neighborhood as their number one consideration. 

The share of homeowners ranking affordability as their top concern rose from 19% in 2014 to 30% in 2023, exceeded only by neighborhood consideration at 36%. 

Also, among the other factors, home size remained the least important home shopping consideration for both renters and homeowners—below affordability, neighborhood, and home quality. So, while plenty of home seekers would love an extra room to use as a dedicated home office, square footage still goes to the back of the line when it comes to these four criteria. That much hasn’t changed since 2014. 

Affordability may also be the key reason more remote workers are willing to move farther away from their workplace. Just as teachers are finding only a small share of the homes near their schools to fall within their housing budget, workers nationwide are faced with the same issue. 

Historically, buyers prioritized a shorter commute time to denser job markets. But the option of working fully remotely has made long, arduous commutes less of an issue. 

Suburbs are the preferred location for the largest share of respondents

The suburbs have had an edge over both urban and rural areas for years, now, but in 2023, it solidified its status as the preferred location for finding a new home—both for renters and homeowners. 

Nearly two out of five (38%) of renters ranked suburbs as the preferred location for buying a home—up from 35% in the third quarter of 2010. And 44% of homeowners chose suburbs over urban and rural areas, compared to 37% in Q3 2010. 

Renters are still more likely than homeowners to show a preference for urban locations, with 27% indicating as much in 2023, compared to only 15% of homeowners. 

Overall, 42% of respondents indicated a preference for suburban areas, compared to 37% in 2010. Most of that increase came at the expense of urban locations. 

Takeaways for real estate agents

Knowing the overall work and housing preferences of prospective buyers is useful information. When it comes to each of your individual clients, of course, you’ll want to go deeper and determine what’s most important to them in their home search. What are their non-negotiables, and what makes them so? For many, if not all, affordability will be at the top of that list. 

Knowing their must-haves can help you focus your search and ensure you’re not wasting their time or yours on properties that won’t suit them. 

It can also open your eyes to housing options and neighborhoods your client might not have thought of yet—but that could be just what they’re looking for.