Inflation is soaring in America’s most popular migration locations, in part because of their boost of new residents and high home price appreciation, Redfin reported.
Phoenix, Atlanta, Tampa, and Miami saw double-digit inflation in Q2 2022. They are also all high migration areas that are popular among Redfin’s users.
Inflation in Phoenix was up 11.3% YOY and is the third most popular city for Redfin.com users looking to move to a new city. Atlanta was the twelfth most popular and had an inflation rate of 10.9%.
Next came Tampa, the second most popular destination on Redfin, with the third highest inflation rate at 10.6%, followed by Miami, the single most popular destination, with the fourth highest inflation at 10% flat.
In these metros, housing costs are contributing more to overall inflation than in the cities people are hoping to move away from. Phoenix’s housing costs are up almost 16% YOY, while Atlanta’s housing costs are up 11%.
At the same time, housing costs are only up 3.8% in San Francisco and 4.2% in New York.
Cities with higher emigration rates are seeing the lowest inflation, starting with San Francisco, which has the most number of Redfin users looking for a new city and an inflation rate of only 5.6%. This is followed by New York (5.9%), Los Angeles (8%), Washington, D.C., (7.1%), and Seattle (8.9%).
“A place’s popularity has a big impact on how much its local prices go up. An influx of people moving into a place like Phoenix or Tampa pushes up demand for everything from housing to food to fuel, which pushes up prices in all those areas and ultimately contributes to overall inflation,” said Redfin Deputy Chief Economist Taylor Marr.
“That means it’s getting more difficult for locals to afford daily expenses, especially when you consider that wages aren’t rising as quickly. In Phoenix, for instance, wages are up about 6% from a year ago but inflation is up more than 11%, and asking rents are up 24%. Homeowners are in a better position than renters because they benefit from rising home values.”