The future of housing

In a post-pandemic, digital-first age, the meaning of home has forever changed.

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Key takeaways

  • The COVID pandemic forced a sudden shift in our relationship with our homes, touching how we work, how we learn, how we play, and more.
  • That shift was magnified by the fact that the pandemic occurred at a time when technologies were already available to help us adapt to a new reality.
  • While the pandemic was a sudden extraordinary event, it may have lasting changes on the future of housing.

Our homes are not what they were 2 years ago. When the pandemic forced millions of Americans to shelter in place for what turned out to be months on end, it marked a fundamental shift in our relationship with our homes. Overnight, they became the primary place where we worked, went to school, talked to doctors, shopped, exercised, and socialized. Enabling all this was a set of technologies that—while not new—allowed us to quickly adapt to the new reality.

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From a historical perspective, the pandemic is analogous to what evolutionary biologists call punctuated equilibrium, an extraordinary event that punctures the status quo and propels lasting change. The scale of these changes has been magnified by the pandemic arriving at a time when so many technologies were ready to meet the increased demands placed on them. The result is a digital reimagining of the home and a reshaping of how we work, learn, play, and age.

How we work

Before the pandemic, just 6% of employees worked primarily from home.1 Today nearly 70% of white-collar professionals rely on video conferencing and digital collaboration tools to work remotely.2 By most measures, this experience has been so successful that it changed our views on how we want to work.

Surveys show increasing numbers of workers would quit or take less money to avoid going back to the office full time.3 While the extent to which our homes will become our regular offices remains unclear, the adamance among so many workers that they won't go back to the way things were is transforming:

What our homes look like. Dedicated workspace is the new luxury in housing, and developers are pivoting to meet this demand. Some homebuilders now offer home office packages with options like soundproofing and custom lighting. Apartment developers are re-examining their floorplans and amenities, adding working nooks and coworking space.4 Some are even installing motorized, built-in furniture from startups like Ori that can transform a desk into a TV stand at the end of the workday.5

How we can earn money from home. Before the pandemic, technology was enabling us to earn income from home in new ways, such as by posting videos on YouTube or renting out spare rooms on Airbnb ( ABNB ). These income sources gained new appeal during the pandemic. More than 50 million people now participate in the creator economy, making content that they distribute and seek to monetize.6 This is even leading some apartment developers to add social media production studios.7 The success of Airbnb has led to an explosion in digital marketplaces that specialize in renting out specific parts of your house, from swimming pools, to driveways, gardens, and garages.

Where we live. Throughout history, where we work has largely determined where we live and vice versa. But the widespread adoption of hybrid work promises to weaken or even sever this connection, especially for white-collar professionals. The number of remote work job postings doubled during the pandemic and continues to rise. Freed from the need to be near the office, more workers may ultimately choose to live in exurbs, smaller cities, and rural areas. Zillow ( ZG ) predicts more than 2 million renters may be able to become homeowners as telecommuting allows them to relocate to less expensive housing markets.8

How we learn

For years, millions of people have used technology to pick up a new language or complete professional training courses. But while companies and adults have been using digital learning for some time, its adoption in schools lagged until the pandemic, which is estimated to have accelerated the adoption of education technology by anywhere from 5 to 10 years.9 This acceleration will have long-term implications for how and where we learn at all stages of our lives because:

Online learning has been normalized. Opinions on how well digital education tools performed during the pandemic are mixed, but there are clear signs an equilibrium has been punctured. The number of undergraduates enrolled in online learning increased 93% as a result of the pandemic, and 59% of colleges and universities plan to continue some or all of their remote learning offerings even after the pandemic.10 Citing demand from students and parents, 20% of K12 schools are also planning to continue offering virtual learning as an option beyond the pandemic.11

Education technology tools will improve. Investors have been pouring money into edtech startups—$12.6 billion in 2020, up from $4.8 billion the previous year.12 The market for edtech tools is forecast to more than double by 2025.13 All this investment is giving educators more options for how to engage students remotely with technologies such as augmented and virtual reality as well as artificial intelligence.

How we play

At no other time in human history have we had so many outlets for socialization and entertainment inside our homes. The average US household with broadband now has 25 connected devices, most of which can be used for entertainment.14 The pandemic accelerated the digitization of how we interact and play from home by increasing our reliance on:

Digital entertainment. The number of US streaming video subscribers more than doubled to 250 million during the pandemic while content consumption increased nearly 75%.15 Consumers who pay for streaming subscriptions now have an average of 5, up from 3 before COVID.16

Gaming. The popularity of video games surged as people stuck at home began using the platforms for shared virtual experiences in addition to gameplay. Among the biggest beneficiaries have been platforms such as Roblox ( RBLX ), which has seen a surge in users and engagement. Virtual experiences like concerts on these platforms deftly combine entertainment, commerce, and social interaction, and may be a precursor for something bigger: the metaverse. While it remains to be seen what the metaverse will ultimately look like, it is certain to expand and transform what we can do and experience at home.

Online dating. People have been using the internet to find partners for decades. What changed during the pandemic is that the actual date moved online. Dating apps adapted to lockdowns by adding the ability to video chat with potential matches, which many users made use of and plan to continue using. "We've been talking about a Tinderverse internally, which is more about blurring the boundaries between offline and online," Renate Nyborg, chief executive officer of Tinder, said in December.17

How we age

Americans have long expressed a strong preference for aging in place: 76% of those over 50 would prefer to remain in their homes rather than move in with family or to a nursing home or assisted living facility.18 Two things happened during the pandemic to accentuate that preference. First, it made staying at home even more of a priority, given that staff and residents of long-term care facilities accounted for such a high proportion of COVID deaths. And second, it punctured the equilibrium for telehealth, which accounted for less than 1% of doctor visits in 2019, spiked to 80% in some places hit hard by the pandemic, and has since settled at about 15% of doctor visits.19

Continued use of telemedicine and other digital health tools will be essential to helping seniors remain at home longer, including technologies designed to assist seniors with:

Health and wellness. Many older adults live with chronic health conditions, and technology is helping seniors manage these conditions from home. Cala Health, for example, makes wearable technology to help treat tremor symptoms, while MedMinder and Hero offer automated pill dispensers that can be programmed to dispense medication and alert caregivers if a dose is missed.

Safety and security. Smart home sensors are bringing a new level of in-home monitoring capable of quickly detecting falls, inactivity, or other worrisome behaviors. SafelyYou, for example, offers an AI-enhanced video tool that can detect a body on the ground and automatically alert caregivers.

Communication and engagement. Social isolation is one of the biggest challenges older adults face as they age in place. Several startups are using technology to offer both virtual and real companionship. Papa connects older adults with younger volunteers who can help with everyday tasks like grocery delivery and household chores. ElliQ, a robot assistant designed for seniors, uses AI to engage its owner by suggesting music, sharing trivia, or simply saying good morning.

Housing affordability

No discussion of housing is complete without addressing a glaring fact: At the same time that technology is transforming how we use our homes, many Americans are struggling to find an affordable place to live. Successfully addressing housing affordability is expected to take a coordinated mix of public and private solutions. A growing number of startups are using technology to try to make housing more affordable by:

Reducing construction costs. With the US facing a shortage of potentially millions of houses, there's a need to find more efficient, affordable ways to build housing. Startups such as Icon are using 3D printing technology to reduce the time, labor, and waste involved in framing a house.20 Other startups, like Cover and Module, use innovative prefabrication techniques to produce houses that can be added to later as a family's space needs change.

Reducing financing costs. Many people struggle to afford the deposit or down payment required to secure an apartment or house. Divvy Homes acts as a temporary landlord for people who can't qualify for a standard mortgage, allowing them to convert a portion of their rent into a down payment later. CoBuy helps friends and family members pool money to purchase a home together.

Reducing living costs. The simplest way to lower housing costs has historically been to get a roommate. A number of companies now offer digital home-sharing services tailored to people in specific stages of life. CoAbode offers a home-sharing program that brings together single mothers, while Nesterly helps older adults with extra space find younger roommates who can help them age in place.

Why it matters

The pandemic forced us to use our homes in new and different ways, driving behavioral shifts made possible by the right technologies being available at the right time. Americans' changing relationship with their homes—the place where they spend the largest share of their time and the single most valuable thing most of them own—will cascade into the future and continue to reshape many aspects of our lives.

For more forward-thinking research and insights, learn more about the Fidelity Center for Applied Technology℠. And if you're currently navigating this tricky real estate market, check out our housing special report for tips for buyers, sellers, and more.

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