Due to recent housing reforms in China, individual consume of urban population has become the principal part of the real estate market, and residents now can select their own home rather than have a home assigned to them by the government. This paper focuses on the main factors that influence the residents who live in cities and towns to select a residential location under the new housing system. The author thinks that the price of the house is the objective condition which affects the urban population to choose their residential location. Once they determine the money that they want to pay for the house, the residential location space is roughly decided. In addition, the traffic convenience and the environment of the residential location are the important objective factors that affect the resident to make decisions. The social, economic and cultural characteristics of the residents themselves and different favoritism they showed for the residential location and environment influence the process and result of the residential location selection as well. Divided social stratum due to different income also affects the division and isolation of the residential space. Overall, since many factors influence the residential location selection in various ways, real estate developers should fully consider the general requirement and consume behavior of residents purchasing houses. Only in this way can developers make the housing development match with the demand of the residents.