Economists' Outlook

Housing stats and analysis from NAR's research experts.

How Commuting Costs Factor Into Home Buying

Either way you look at it, buyers know that commuting costs are high. Some buyers need to be closer to their job while others need to be close to school districts. The National Association of REALTORS® releases its annual report Profile of Home Buyers and Sellers Report to understand the trends of buyers and sellers. One trend we found fascinating in 2015 was the emerging importance of commuting costs. We cut the data and found 30 percent of respondents purchased homes this year to reduce commuting costs as they cited this factor as being very important to them.

We segmented this group further and found that 64 percent of buyers purchased their home so that it was convenient to their job, which was the most important factor in selecting a neighborhood. Of this group, 23 percent cited that they compromised on the price of their home to be geographically closer to work and thus have more free time for friends and family. What is also interesting to note is that this group was also made up of 40 percent first-time home buyers, compared to the 32 percent of all buyers that purchased a home this year.

The median age for this group was 39 years old; they bought homes with three bedrooms, two bathrooms, and were typically 1,900 square feet. The median income was $82,000 and the median home price purchased was $212,000.


So how does this compare to other buyers? We segmented married couples that had children under 18 living at home because it was similar in size as a subgroup, which comprised 34 percent of all buyers. Forty-three percent of this group cited that the distance to schools was the most important factor in selecting a neighborhood. Twenty-seven were first-time buyers, closer to the overall median, and these homes were typically larger with four bedrooms and two bathrooms at 2,200 square feet. The median age for this group was 36 years old; they bought homes with median income of $100,000 and the median home price purchased was $260,000.

The data also indicates that once families had kids, living closer to schools took priority over living closer to work. When segmented for children living at home, respondents reported that they actively compromised on the distance from their jobs more than any other group (18 percent with kids at home, compared to 13 percent of all buyers and 10 percent with no kids at home).

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