Photo: Robert Clark
Homeowners fleeing the big city in search of greener and more affordable pastures in the suburbs may just find out there’s a lot of truth in the old adage “the grass isn’t always greener” — or cheaper.
The suburbs in many big American cities are often even less affordable than their urban counterparts, according to a new report by the listing site Zillow.
“The suburbs are the most common destination for today’s home buyers, with 48 percent of all buyers purchasing a home in the suburbs,” reads the report.
Finding a home they like that is within their budget is reportedly the top concern among homebuyers. But location can drastically impact the price, forcing many buyers to accept compromises, like a resale home over new construction, to stay within their budget.
At the national level, the typical urban homeowner spends 26.5 percent of their gross income on housing costs — just below the industry accepted 30 percent standard. Most financial experts recommend spending no more than 30 percent of income on housing costs, including mortgage payments, fees and insurance costs per month.
Meanwhile, the suburban homeowner spends about 20 percent on income on housing.
For example, the typical New Yorker spends 40 percent of income on housing to live in the Big Apple, compared to dropping about 27 percent to live in the suburbs.
Bucking the trend, life in the ‘burbs turns out to be a bigger financial burden for buyers in about half of the country’s largest markets (17 of the top 35 metros), compared with the costs of urban living.
“Suburban homes tend to have higher prices, but lower prices per square foot. So while suburban homes offer a great deal for buyers who need lots of room, buyers who do not need a lot of space can be pressed to justify the extra costs associated with the additional space. A general lack of smaller homes, with lower prices, is a bigger affordability challenge in the suburbs,” Zillow senior economist Aaron Terrazas tells Livabl.
Philadelphia, Pennsylvania buyers will spend twice as much to live in the suburbs compared to the urban center, while buyers in Detroit, Michigan will need to spend nearly four times as much to live in the suburbs.
Buyers in Las Vegas, Nevada will have to shell out 8 percent more of their income if they want to live far from the glitz of the Vegas strip in the ‘burbs outside of the fabulous Las Vegas. The Vegas housing market was hit hard by the housing collapse and it is one of the few markets still struggling to regain its footing. Average Vegas home prices are still below well below historic norms and pre-crisis peaks.
“Choosing where to live depends on many factors other than strictly financial terms. The size and space of the home and the nearby amenities have to meet your needs, or come as close as possible,” Zillow director of economic research and outreach Skylar Olsen says in a statement.
Click here to read the entire report.