Rural Housing Shift: Vacation Area Home Prices Surge Post-Pandemic

Home prices increased at an unprecedented rate following the start of the Covid-19 pandemic. The proliferation of remote work, enabling households to live further from their place of employment, contributed to especially sharp home price increases in rural areas. Using county-level data on home values in non-metro counties across the country, we find that prices in rural counties increased 36.1 percent between March 2020 and March 2023, doubling the rate of appreciation in the three years preceding the pandemic. But in counties with a high share of vacation and second homes, prices rose an even more astounding 46.8 percent. This rise was propelled in large part by a surge in domestic migration into rural areas over this period. Home values also rose substantially in rural counties with higher and lower levels of urbanization. Multivariate regression models that account for differences across non-metro counties generally confirm the stark price increase in vacation counties, while showing that counties adjacent to metro areas, with lower densities, and with smaller urban populations had modestly more home price growth as well. In response to rising prices and the influx of domestic migrants, additional public support might be required for long-time residents and seasonal workers with lower incomes to cope with rapidly rising prices and worsening affordability. Likewise, expanding the supply of housing through new construction, especially of moderate-cost housing types, remains essential.