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Suburban dream losing steam

By Judy Martel · Bankrate.com
Tuesday, August 6, 2013
Posted: 4 pm ET

The post-World War II American dream of owning a home in the suburbs with a spacious yard for the 2.5 kids and dog is becoming less attractive when seen through the reality of long commutes and weekends consumed with yardwork.

Leigh Gallagher, assistant managing editor of Fortune and author of the book "The End of the Suburbs: Where the American Dream Is Going," writes that suburbs and their further communities, called "exurbs," are losing population in most parts of the country as homeowners favor metropolitan areas. Part of the reason has to do with the housing bust and its devastating effects on suburban communities, she writes, and part has to do with a cultural shift.

Suburbs snooze and lose

Since World War II, every generation saw more population growth in the suburbs than the cities, but the most recent U.S. Census marks a reversal of that trend. The 51 largest metro areas in the country, all with populations of more than 1 million, saw population growth of 1.12 percent between July 2010 and July 2011. By contrast, the suburbs of those metro areas grew 0.97 percent last year.

William Frey of the Brookings Institution, who analyzed the Census data, told Reuters that he would have expected the improving economy to assist more people in moving from the city to the suburbs. During the housing crisis, many homeowners found they owed more on their mortgage than their house was worth, forcing them to stay put.

Foreclosures and distressed properties were much more prevalent in the suburbs, while the housing market in most metro areas remained fairly stable. Gallagher maintains that this is only part of the disillusionment with suburbs. Homeowners are also tired of spending most of their days in cars, driving to work or kids' activities. In metropolitan areas, they are willing to trade space for convenience.

But is it permanent?

Now that the market is recovering, rising prices are giving homeowners positive equity, allowing them to sell. As people begin moving again, Frey said time will tell if the trend away from suburbs is a permanent one. He suggested that the downturn in the economy, which caused many young people to delay marriage, kids and homebuying, may have been responsible for the reluctance to move to the suburbs.

Keep up with your wealth and mortgages, and follow me on Twitter @JudyMartel.

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4 Comments
joe tried
May 12, 2014 at 9:18 am

here on Long Island, New York, it has been futile. If I could go back in time, I wouldn't have purchased my home that I am stuck in. The cost of living is not in pace with income and hasn't been for far too long.

Ajax
August 13, 2013 at 1:13 pm

I purchased a home in the exurbs and it has worked out excellently for me. Since I was retiring the commute was a non issue. No drawbacks. No problems.

BigDigData
August 08, 2013 at 9:37 am

"The 51 largest metro areas in the country, all with populations of more than 1 million, saw population growth of 1.12 percent between July 2010 and July 2011. By contrast, the suburbs of those metro areas grew 0.97 percent last year."

Wow - 15 basis points difference in growth rates

daring sally
August 07, 2013 at 3:05 pm

If the taxes don't stop you dead in your tracks the mortagage alone will certainly nail the coffin completely shut. I longed for a house of my very own for years but finally came to the realization that it was only a dream. There is no more job security and the house would never be mine. The taxes will more than likely cost me more than my paycheck each year. It will be a never ending process. I don't even daydream about it anymore. The good ole American Dream is just that, a dream.