Data Reveals a Growing Preference Among Americans for Affordable Suburban Living

In This Article

Key Takeaways

Low-priced suburban areas, particularly those under $250,000, are experiencing significant population growth as young adults move away from expensive cities. Areas like Mooresville, NC, Hamtramck, MI, and Buckeye, AZ are among the fastest-growing suburbs due to affordability, proximity to major cities, and employment opportunities. These areas offer diverse price points and population growth exceeding 20% in just two years. While millennials and older generations are moving to the suburbs for affordability and family life, Gen Z is moving into cities, often relying on co-living arrangements. Suburbs remain attractive to families for stable rental income, with investors benefiting from strong demand due to good school districts and proximity to urban centers.

If you’re wondering which real estate markets make for the best investments going into 2025, the suburbs are where the action is. With affordability a major concern for buyers, low-priced suburban areas—often below $250,000—are experiencing a surge in new residents.

The good news for prospective investors is that, according to a recent report by GoBankingRates.com, these pockets of real estate gold are spread out throughout the country and represent some of the fastest-growing areas.

The Lure of the Suburbs

A recent Harvard study found that contrary to the demographic movements of previous generations in the 2000s and early 2010s, young adults in their 20s and 30s are the driving force behind the movement to the suburbs today. The reason? Cities are too expensive to live in.

“While there is extensive research and discussion about millennial preferences for walkable urban areas, we found that the places with the largest increases of early millennials were both suburban and on the periphery of metropolitan areas,” said Riordan Frost, a senior research analyst at Harvard’s Joint Center for Housing Studies.

The Top Five

To qualify for GoBankingRates.com’s list of hot suburban markets, each area needed a 9% or greater change in population from 2020 to 2022 and was required to be part of a metro area with at least 1 million in population. All home values had to be below $500,000, with all data collected as of Aug. 13.

When the top five of the 50 listed suburbs are examined, the first thing that becomes evident is the geographical and price diversity.

1. Mooresville, North Carolina

July 2024 home value: $480,430 2020 total population: 38,498 2022 total population: 50,025 Two-year percentage change in total population: 29.94% Median rent: $2,273

A suburb of Charlotte, Mooresville generally skews on the higher price side, with homes close to $500,000. However, a Zillow search shows plenty of homes, even new-construction three-bedroom communities, below $250,000.

Mooresville is only a 30-minute commute (28 miles) to Charlotte, a hub for banking and financial services and manufacturing, energy, and automotive business.

2. Hamtramck, Michigan

July 2024 home value: $167,930 2020 total population: 21,704 2022 total population: 27,842 Two-year percentage change in total population: 28.28% Median rent: $1,050

Your money goes a long way in Hamtramck, with many three- and four-bedroom homes priced below $200,000.

3. Buckeye, Arizona

July 2024 home value: $407,118 2020 total population: 74,467 2022 total population: 95,042 Two-year percentage change in total population: 27.63% Median rent: $1,995

In Buckeye, a Phoenix suburb, you can buy a stylish, renovated ranch for under $400,000

4. Union City, Georgia

July 2024 home value: $259,054 2020 total population: 21,976 2022 total population: 26,869 Two-year percentage change in total population: 22.27% Median rent: $1,829

In another imminently affordable suburb, it’s easy to snap up a stylish new or recently renovated three-bedroom home for under $250,000

5. Canyon Lake, Texas

July 2024 home value: $461,779 2020 total population: 26,338 2022 total population: 32,035 Two-year percentage change in total population: 21.63% Median rent: $1,688

Located about 40 miles from downtown San Antonio, Canyon Lake offers a great escape from urban living with water sports and family-friendly activities.

Gen Zers Are Moving to Cities In Droves

While millennials and older generations are moving out of cities, Gen Zers are moving in. Between 2021 and 2022, more than 42% of people moving to New York City were Gen Zers. Major metropolitan areas, including New York, are experiencing population losses among all generations, except for Gen Z, according to a recent report.

For those looking to start families, the suburbs remain a draw, changing the image of suburban living with trendy amenities.

Final Thoughts

The traditional concept of cash flow has been challenged by recent housing market trends. However, certain suburban markets offer opportunities for investors willing to explore beyond median prices.

Suburbs are ideal for rental investments, attracting families seeking stability and good schools. With the right location, investors can benefit from strong demand and high occupancy rates.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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