Do Home Buyers Prefer Cities Over Suburbs?

There is an ongoing debate over whether or not demographic trends reveal a preference for city living or suburban neighborhoods among Americans on the move. For many years, the suburbs were the most popular spot among buyers but recent evidence may indicate that Americans are beginning to move back to the city. According to Fitch Ratings’ RMBS Sustainable Home Price Report, the proof is in the prices. In short, home prices have been rising faster in cities than the surrounding area and that’s because more Americans are looking to buy a home in the city. In other words, stronger price growth in urban centers is a reflection of a broader shift in population growth trends. “This demand shift implies that city centers will continue to see growth even where regional prices have been stagnant, such as Atlanta or Chicago,” Fitch director, Stefan Hilts, said. In fact, over the past 15 years, home prices have grown 50 percent faster in city centers. Hilts added that one of the byproducts of an increased preference for cities over suburbs is that homeownership rates may remain low, as more potential home buyers opt to live in areas where rentals dominate. More here.