A new age of suburbanisation could be dawning

THOUGH THE pandemic has not fully released its grip on America, signs of an incipient boom are everywhere: in surging demand for workers, imports and, above all, houses. Residential property prices rose at an annual rate of 12% in February—the fastest pace since 2006—buoyed by rising incomes, low interest rates and the belated plunge into housing markets by a crisis-battered generation of millennials. A clear preference for large but affordable suburban homes over pricey city-centre flats seems to be emerging. That covid-weary Americans might be eager for suburban life is hardly surprising. Yet the latest pursuit of leafiness and expansive floor plans contains hints of a potentially transformative shift in how Americans choose where they live.

People’s housing decisions incorporate much more than mere economic concerns. Yet the geographical distribution of households reflects some rough balancing of the costs and benefits of living in one place rather than another. Other things equal, people flock to areas that provide access to good jobs or desirable amenities, like pleasant weather, or a lively arts scene. Movement towards attractive places is ultimately checked, however, by the associated costs—congestion, say, and the price of housing—which rise until there is no longer much to be gained from relocating.