Rural Living Is Booming — And This Loan’s the Reason

More Americans are choosing rural life

The Census Bureau says that, since the pandemic, home buyers have been moving from urban centers to inner suburbs and rural locations.

They’ve been driven mainly by the expansion of remote working, triggered by the Covid-19 pandemic, which means they can live almost anywhere.

But another factor may be the existence of a type of rural housing loan that requires zero down payment and is available in many suburbs. Keep reading for more information about this mortgage.

In this article (Skip to...)

• Factors driving city living decline
• Influence of remote jobs
• Housing market impact
• Rural housing loan eligibility
• Pros and cons of small-town living

Factors driving the decline of city living

The NAR’s 2024 Migration Trends report reveals, “Job location did not play a role in the purchase decision for 43% of REALTORS®’ recent clients, as they continue to work remotely, while job location did influence 37% of movers who work at least some of their time in-office.” So, it’s still the case that a huge proportion of buyers remain free to live where they choose.

That NAR report went on to identify the top three reasons home buyers give for moving to a different area:

1. Closer to family and friends
2. More home for the money
3. Safer area or less crime

You can see how all three of those could apply to remote workers moving out of city centers. Even if you’re not moving to be closer to family and friends, you’re certainly likely to be able to afford a much larger home with a decent yard in a suburban or rural setting.

And there’s plenty of evidence that violent and property crime rates are much higher in urban than in other settings. Here are the Bureau of Justice Statistics’ official figures for 2021:

Rates are per 1,000 persons age 12 or older for violent crime and per 1,000 households for property crime.

Influence of remote jobs on housing preferences

NAR's Migration Trends Report established that, among American home buyers, the group who are not tied to a workplace outnumbers the one where commuting must remain a serious consideration. Naturally, that’s different in the population as a whole.

Jobs in some industries simply can’t be done remotely. For example, most roles in manufacturing, retail, distribution, first response, health, maintenance and the restaurant sector absolutely require an on-site presence. There’s likely a correlation between homeownership and the often higher-paid jobs that can be performed at home.

What has enabled remote working is new technology in computing and communications. Broadband, in particular, now allows a wide range of white-collar jobs to be done anywhere in the world. And, as the 5G mobile infrastructure and fiber network roll out, the possibilities for location-independent working increase.

For instance, you probably had no idea until now that this article was written in France. But it was, using 2 GB fiber. And millions of “digital nomads” are currently globetrotting, combining travel, adventure and work.

However, that lifestyle is not for everyone. And most remote workers prefer a base they can call home.

As importantly, given the large amount of time they spend there, they often want that home to be spacious and comfortable. Affordable examples of those are much more common in suburbs, small towns and rural locations.

Affordability crisis in urban areas

City living doesn’t come cheap. And even those who enjoy the buzz of a downtown lifestyle may struggle to afford one.

In a different study, the NAR found that “Almost 90% of metro markets (201 out of 226, or 89%) experienced home price increases in the fourth quarter of 2024.” That’s great if you own your home, but it’s a nightmare for renters.

Zillow said in January 2025, “The income needed for renters to comfortably afford housing continues to slowly climb along with rents, now reaching $78,722.”

If that’s what you need to keep a decent roof over your head, how much must you earn on top of that to save for a down payment on your own home? In such situations, don’t ignore down payment assistance programs that can provide cash help, especially to first-time buyers.

Meanwhile, property taxes are typically calculated as a percentage of the home’s value. So, the high average home prices in inner cities tend to deliver a double whammy.

No wonder so many choose for financial reasons to increase the bang their property bucks buy them by moving to suburban, rural or small-town locations.

Desire for more space

You’d need to be seriously attached to an urban lifestyle not to be attracted to the idea of trading your cramped downtown apartment for something more spacious.

Imagine the joy of working from your own home office rather than a kitchen countertop or a desk in the corner of your living room — while maintaining much the same housing costs. You could probably get a second (and maybe a third) bedroom for visiting family and friends, too.

Plus, there may be a private yard where you can entertain, relax and perhaps explore the joys of gardening.

Meanwhile, if someday you choose to have kids, you won’t immediately have to move to a bigger house in a safer place with better schools. And, if the time comes, you may one day be able to accommodate elderly parents.

The impact on the housing market

As you’d expect, the law of supply and demand has kicked in since residents started fleeing city centers. However, the effect on home prices may not be as big as you would think.

Rentastic, which provides specialist accounting software for professional landlords, notes, “Look back over the last ten years, and you’ll see housing inventory in the outer suburbs – the exurbs – grew about 15%. That’s a notch above suburban growth at 14%, and it leaves the 10% growth in city centers in the dust.”

In other words, as migratory trends have developed, the supply of available homes in each type of location has adjusted. 

And, of course, there’s little sign of excessive numbers of vacant homes in city centers. That’s partly because a significant proportion of residents still need to be near their workplaces.

And, of course, the buzz and convenience of inner-city life continue to appeal to many. As the NAR found, there’s little sign of downtown home prices falling, and we may be seeing some resurgence in demand as some employers try to force remote workers back to their offices.

A closer look at rural housing loan eligibility

At the start, we mentioned rural housing loans that come with zero down payment requirements. These are guaranteed or provided by the U.S. Department of Agriculture and are often called USDA loans. There’s good and bad news about these.

Home eligibility for rural housing loans

First, the good news. Although these are “rural development” loans, they are actually available in suburbs and smaller towns and cities. In practice, if a home is in an area with a population no greater than 35,000 people, it may be eligible.

This is a government-backed loan, so the geographical eligibility rules are more complicated than that. However, you can find a look-up tool on the USDA’s website that allows you to type any address. The tool will give you an indication of that home’s likely eligibility. There’s also a map version that will zoom into the area that interests you.

Suffice it to say that the USDA regards roughly 97% of the U.S. landmass as eligible for its rural housing loans. And that area is home to nearly 110 million people. So, don’t give up just because the place you want isn’t in the middle of nowhere.

Stick with it because these loans offer more than a zero down payment. They also come with competitive interest rates and reduced mortgage insurance premiums.

Borrower eligibility for rural housing loan

Now for the bad news about these USDA rural housing loans. Your income may be too high to qualify for one.

To be eligible, your household income can’t exceed 115% of the area median income (AMI) where you want to buy. That’s an official statistic based on local data and is adjusted for the number of dependents you support.

But who knows their local AMI? Anyone? Probably not. But, again, you can check it using a look-up tool, this time on Fannie Mae’s website.

Rural housing loans and the exodus from city centers

Some whose incomes have supported a decent downtown lifestyle may earn too much to be eligible for a USDA rural housing loan. But plenty of remote workers are on more modest incomes, and, for them, one of these mortgages can smooth the otherwise rocky path to homeownership.

Anecdotally, awareness of USDA rural housing loans is low. Many home buyers have never heard of them. So, it’s hard to ascribe how much of a pull factor they are to city dwellers who are looking to move to the suburbs and beyond.

But they should be a big one. And, if you know a renter in a city who dreams of homeownership somewhere quieter, do them a favor and forward them this article.

Pros and cons of suburban and small-town living

Pros

• More affordable housing options, larger homes, and access to green spaces.
• Homeownership opportunities with no down payment, thanks to rural housing loans.
• Better quality of life, including quieter neighborhoods, lower crime rates, and a greater sense of community.
• Potential for higher returns on investment as suburban and small-town markets grow in demand.

Cons

• Less access to urban amenities, such as public transportation, entertainment and job opportunities.
• Potential for slower economic growth or fewer job options in smaller towns.
• Possible isolation or fewer social opportunities, particularly for younger buyers or professionals seeking a vibrant social scene.

What buyers need to know

If you’re used to urban living, you may experience some culture shock when moving to the suburbs or a small town. So, take care to research the place you’re going to move to before committing yourself.

First, prioritize what you want from your next home. It may be the things that the NAR survey found: living closer to family and friends; being able to afford a bigger and better home; and enjoying a safer environment with less crime.

But you may have other needs. For example, if you can work anywhere, why not choose somewhere with low income and property taxes? Or your lifestyle may mean you value having great restaurants, bars, and clubs and an easy Uber ride from home. Perhaps school districts may be important. Maybe you’re more interested in the area’s potential for home price appreciation. 

Build a short list of candidate places based on your priorities using web research. A simple search of “Living in [town, city or county], [state]" can often reveal a lot about the pros and cons of a particular location.

Don’t forget to use the look-up tools to see whether the homes there and your income, compared to the AMI, make you eligible for a rural housing loan. Or, if not, might the state’s or county’s programs see you qualify for down payment assistance?

Then, visit the ones that are highest on your short list. Bear in mind the season when you’re visiting: Will it be too cold in winter or too hot in summer?

Visit some open houses to see what your money could buy you. Not for you? Eliminate that location and move on to the next one on your list.

When you find somewhere you really like, engage with a local real estate agent and work together to find you your ideal home.

The bottom line

Some people adore living in big cities. But remote working means many are free to work anywhere, and an easy commute to the office has become valueless for them. 

So, increasing numbers are looking at moving to distant suburbs, small towns or rural locations. Almost always, they can trade their cramped apartments and condos for much more spacious houses with private yards.

This can be especially attractive to those paying extortionate downtown rents, who currently struggle to save for a down payment on a home. They may well be eligible for a rural housing loan that requires zero down payment, giving them an easy shortcut to their homeownership dreams. 

And a rural housing loan brings other benefits, such as a below-market interest rate and less costly mortgage insurance. Couple that with typically lower property taxes, and the numbers can be compelling.

Interested? Why wait? Start to check out locations now, and run the numbers using a mortgage calculator.