CHM Blog

Walkable neighborhoods? A good idea, but NIMBY

In Europe, it’s commonplace to want to live somewhere you can walk to a coffee shop, a park, or a market. But here in the U.S. of A., most people are okay with jumping in their cars with their reusable grocery bags. Seems, however, that they prefer not to any longer if all the stars align for a walkable neighborhood.

The latest Community and Transportation Preference Survey from the National Association of Realtors puts a number on it: 64% of respondents say they would pay more to live within walking distance of parks, shops, and restaurants. And when asked to make a real trade-off, 59% chose a smaller-yard home in a walkable neighborhood over a larger-yard home that requires more driving.

As Realtor.com's Allaire Conte reports, the numbers get complicated when walkability shifts from an abstract preference to a question of what actually gets built nearby. Support for small-lot single-family homes in respondents' own communities sits at 63%, which is reasonably strong. It drops to 51% for townhomes and duplexes, 44% for rental apartments, and 40% for condos. The same people who want walkable neighborhoods often balk at the housing types that make walkable neighborhoods financially viable to build. That contradiction sits smack in the middle of why so little progress gets made.

Gas prices are definitely a culprit. Up more than 40% in 2026 following the war in Iran's disruption of the global oil market, fuel costs have made car-dependent living measurably more expensive. New cars are nearly 30% pricier than they were in 2020, and the average new-car payment has reached an all-time high of $770 a month. The math of owning a home on the suburban fringe looks different when you add that to the mortgage. San Antonio-based broker Levi Rodgers says the premium for walkability is already showing up in sales data. Homes in walkable neighborhoods in his market sell for roughly 15%-25% more per square foot than comparable homes in car-dependent cul-de-sacs, and they sell faster.

Still, truly walkable neighborhoods remain scarce. Joel Berner, senior economist at Realtor.com, puts a specific number on just how scarce: only 2.8% of properties nationwide score an 8.0 or better out of 10 on Local Logic's pedestrian-friendly index, which measures proximity to daily destinations, street connectivity, and overall ease of getting around without a car. Even in markets where walkability is essentially the product, inventory is the constraint. The challenge isn't finding walkable neighborhoods in places like Manhattan. It's finding available inventory within those neighborhoods.

The gap between what people want and what they can actually find is also showing up in how homes get marketed. In May 2024, just 0.4% of listing descriptions used the word "walkable." By May of this year, that share had reached 1.0%, a signal that sellers and agents are increasingly treating proximity as a selling point rather than a given. But what is walkable to some is a marathon to others, so Realtors have to be super careful about how they present it.

The biggest barrier to walking, cited by 71% of respondents, is simple distance. The places people need to go are just too far away. Traffic safety came next, cited by 39%, and that concern isn't abstract. Pedestrian deaths in the U.S. rose 70% from 2010 to 2023, even as peer countries moved in the opposite direction. Sweden's Vision Zero approach cut pedestrian deaths by 65% over a similar period. The European Union reduced road deaths by 25% since 2011.

What that points to is a design problem more than a desire problem. A sidewalk is only useful if there's somewhere worth walking to. Walkability at scale requires homes near destinations, and destinations near homes, which means zoning that allows the kind of mixed-use, higher-density development most communities still resist.

Realtor, TBWS

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are moving sideways today. The MBS market worsened by -19 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) The Fed and 3) Inflation.

1) Geopolitical: This will continue to dominate long bonds as this weekend's further escalation in the Middle East and the potential closure or partial closure of the Straight of Hormuz creates more instability and uncertainty.

2) The Fed: Fed Chair Warsh will Testify on Tuesday and Wednesday and we will get the Fed's Beige Book on Wednesday. We also have a ton of speeches this week from FOMC members.

3) Inflation: We get a lot of inflationary related data this week. Headline CPI is actually expected to be negative on a MOM basis. Obviously this is due to energy prices dropping short term. We also get PPI, Import and Export Prices.

Honorable Mention: Retail Sales on Thursday will get a lot of attention as will the Bank of Canada's Interest Rate Decision.

This Week's Potential Volatility: High

This morning markets are moving sideways despite geopolitical concerns. Volatility has started at moderate levels but could easily become high any time this week.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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