Home prices across the U.S. climbed rapidly after the pandemic began, but the sharpest increases were not limited to big cities. New research shows that rural and vacation-focused communities experienced some of the fastest home price growth in the country, fueled largely by remote-work migration.
A new working paper from Harvard’s Joint Center for Housing Studies (JCHS) takes a closer look at which rural markets saw the biggest gains and why. The research was led by Alexander Hermann, Senior Research Associate, and Peyton Whitney, Research Analyst.
Rural Home Prices Rose Faster Than Ever Before
According to the study, home prices in non-metro counties increased about 36.1% between March 2020 and March 2023 roughly double the pace seen in the three years before the pandemic.
However, the growth was even stronger in rural vacation counties, where homes are often used seasonally or as second residences. In those areas, prices jumped an average of 46.8% over the same period.
These vacation markets tend to feature scenic locations, strong tourism industries, and limited housing supply factors that made them especially attractive during the remote-work shift.
Remote Work Changed Migration Patterns
One of the biggest drivers of rising rural home prices was a major shift in where people chose to live.
As remote work became more common, many workers no longer needed to stay close to offices. For the first time in more than a decade, net domestic migration turned positive in rural counties.
- From 2017 to 2019, rural areas lost about 77,900 residents
- From 2021 to 2023, rural counties gained a net 540,400 residents
This sudden inflow of people increased demand in housing markets that were not built to handle rapid growth.
Regional Differences in Price Growth
Rural home price growth varied by region, but increases were strong nationwide.
Between March 2020 and March 2023:
- Northeast (non-metro): +40.5%
- West (non-metro): +40.7%
- South (non-metro): +35.5%
- Midwest (non-metro): +31.4%
Before the pandemic, price growth across these regions was much more modest, ranging from roughly 14% to 21% over three years.
Vacation Counties Saw the Biggest Gains
Counties with a high share of vacation or second homes experienced the most dramatic changes. These areas make up about 14% of non-metro counties and are commonly found:
- Along the East and West Coast
- Near the Great Lakes
- In mountain regions of the Northeast and Mountain West
In these vacation counties:
- Home prices rose 17.4% in the three years before the pandemic
- Prices surged 46.8% in the three years after it began
Price growth was strong across every region:
- West: +51.1%
- Northeast: +50.9%
- South: +47.5%
- Midwest: +37.4%
Which Rural Areas Saw the Fastest Growth
The researchers also examined how factors like density and proximity to cities influenced price growth.
Their findings suggest that home prices increased slightly more in rural counties that:
- Are closer to metro areas
- Have lower population density
- Have smaller urban centers
These trends, combined with the strong performance of vacation counties, point to growing demand for rural living that still offers access to jobs, services, and transportation.
Housing Pressure on Local Workers
Many vacation-focused rural communities depend heavily on seasonal and lower-wage service workers. Rapid price growth has made housing less affordable for these residents, increasing pressure on already limited housing supply.
The study notes that communities may need to expand support programs, including:
- Housing vouchers
- Property tax relief
- First-time homebuyer assistance
- Other income-based housing programs
Without intervention, local workers may struggle to remain in the communities that rely on their labor.
Building Homes in Rural Areas Remains Difficult
Even as demand rises, adding new housing in rural areas is challenging. Builders often face:
- High infrastructure costs
- Limited access to utilities
- Shortages of skilled construction labor
The researchers emphasize the need to expand both market-rate housing and more affordable options, such as manufactured homes, to meet future demand.
What Comes Next for Rural Housing Markets
If remote work remains common and migration trends continue, rural and vacation markets are likely to face ongoing pressure. While rising home values have benefited some homeowners, they also raise concerns about affordability and long-term sustainability.
The study suggests that planning, targeted housing policy, and investment in rural infrastructure will play a key role in shaping the next phase of growth in these communities. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
