The share of Redfin users looking to move to a different metro area is near its record high as high rates and prices up the appeal of affordable places
- Homebuyers are looking to move to the Sun Belt, especially Florida
- Buyers are also leaving expensive West Coast and East Coast cities
Nearly one-quarter of U.S. homebuyers looked to move to a different metro area in the three months ending in October, according to a new report from Redfin.
The technology-powered real estate brokerage said ina recent report that the percentage is on par with the record high of 24.2% set in the third quarter — up from roughly 18% in 2019, before the pandemic ushered in the remote-work era that gave many Americans more flexibility to relocate.
Redfin said in its report that Sacramento, Las Vegas and Miami are the most popular destinations for users looking to relocate, followed by San Diego and Tampa. Popularity is determined by net inflow, which is the number of people looking to move into a metro minus the number of people looking to leave.
Additionally, half of the top 10 migration destinations are in Florida (Cape Coral, North Port-Sarasota and Orlando are all on the list, in addition to Miami and Tampa). That’s despite the fact that the state was hit by Hurricane Ian, a Category 4 storm, in September.
Redfin added that affordable Sun Belt metros are typically most popular with relocating homebuyers, largely because buyers can get more home for less money. In Las Vegas, for instance, the typical home cost $410,000 in October, roughly half the price of the typical home in Los Angeles ($823,000)—the most common origin for people moving there.
Homebuyers are also looking to leave San Francisco, Los Angeles, New York, Washington, D.C. and Boston more than any other major metro.
Redfin highlighted in its report that the U.S. housing market has cooled significantly during the second half of 2022 as high mortgage rates, inflation and a stumbling economy deter would-be homebuyers and sellers. And noted that the people who are still buying homes are doing so are relocating to new metros. Many are seeking relative affordability as near-7% mortgage rates and persistently high home prices make expensive parts of the country even more expensive.
The average 30-year-fixed mortgage rate hit 6.9% in October, up 3.83 percentage points from 3.07% one year earlier—the largest year-over-year increase during any month since 1981. That has caused monthly mortgage payments for homebuyers to roughly double from a year earlier. And while rates have come down slightly in November, they’re still significantly higher than they were last year.