More Americans than ever are searching for new homes outside their current metro, driven to more affordable areas by high interest rates and economic uncertainty.
New data from Redfin found that fewer people purchased homes in Q4 2022 and 24.6% of its users looked to move to a different metro, up from 22.1% YOY.
Though fewer people actually bought a home last quarter, those who did swapped cities at an “unprecedented rate.” Redfin analysts noted that the data was driven by remote workers with the flexibility to seek out more affordable areas.
But the same high rates and inflation that push potential buyers into new places are keeping them in their homes. Eight of the top ten destinations in Q4 had fewer buyers looking elsewhere than at the same time a year ago.
Sacramento and Las Vegas were the most popular destinations, both with net inflows of 5,500, down from 6,500 last year.
Fifth-place Phoenix’s inflow was down more than half YOY. Net inflow is the number of people looking to move into a metro minus the number of people looking to leave.
“Phoenix is typically a huge vacation-home market, but I’ve seen a big decline in people purchasing second homes and investment properties lately. There are still out-of-towners buying homes and moving here full time, though that has also slowed down over the last several months as mortgage rates have risen,” said local Redfin agent Heather Mahmood-Corley.
“Still, the cost of living in Phoenix is low compared to places like the Bay Area, Seattle, Denver, and parts of the East Coast, where many out-of-towners are coming from. I helped one client buy a home in Washington State in 2016, and it has doubled in value. She sold that home last year and used the proceeds to buy a much bigger, nicer house in Phoenix.”
The Sun Belt continues to see high migration due to its relatively cheap cost of living.
Five of the top ten are in Florida, a continuing trend. Dallas and Houston also ranked high.
Texas’s population recently surpassed 30 million, making it the only state other than California with this many residents.
But not everyone is making moves based on money.
Vox reported that San Francisco has seen a worker surge since last year, with more people moving in than leaving. This can be attributed to people needing to return to their offices a couple of times a week, as well as the general rule that popular metros will remain popular despite high prices.
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