It's not just about 'location, location, location' anymore - housing market priorities have shifted

• The mantra in real estate has long been "location, location, location," but that may be changing.
• A home's neighborhood is no longer the top priority for house hunters, a Fannie Mae survey found.

The mantra in real estate has long been "location, location, location," but that may be changing — at least in the housing market.

A home's neighborhood is no longer the top priority for house hunters, according to a new Fannie Mae survey.

It found that 36% of respondents said affordability was the most important factor when selecting a new home. That's more than the 33% who said neighborhood was the top consideration.

The last time Fannie Mae asked this question in 2014, 20% said affordability with the biggest priority versus 49% who said neighborhood.

"The striking shift toward affordability as the top consideration among overall survey respondents for their next move substantiates the need of households to find ways to manage around the significant rise in mortgage rates, home prices, and rents of the past few years," Fannie Mae said.

The latest survey also showed that affordability grew in importance among both renters and homeowners.

For tenants, affordability jumped to 46% from 21% in 2014, and neighborhood sank to 28% from 45%.

For owners, affordability increased to 30% from 19%, and neighborhood fell to 36% from 52%.

These changes stem from a housing market that's become unaffordable for many Americans, as low inventory keeps prices up, while the Federal Reserve's rate hikes have sent mortgage rates to the highest in more than 20 years, disincentivizing homeowners from selling their properties.

"Home affordability may also be a reason why we saw an increase in remote workers' willingness to relocate or live farther away from their workplace, particularly given that, historically, a shorter commute to denser job markets was considered a premium amenity," Fannie Mae said.

Between 2021 and 2023, renter willingness to move farther away went to 29% from 21%, and homeowner willingness grew to 17% from 10%.

"We believe this greater willingness to live farther from the actual or nominal workplace may be an indication that some workers are feeling more secure about their remote work situation and/or their ability to find another job if their current employer were to change its policies," the report said.