BAM’s Key Details:
- A new Redfin report shows a near-record high of Redfin.com users moving away from expensive job centers in search of more affordable homes
- With high mortgage rates and inflation straining homebuyer budgets, 24.1% of Redfin.com users looked to move out of their current metros
- That percentage is near the record high set in the summer and up from the pre-pandemic rates of about 18%
A new Redfin report is showing a near record share of Redfin.com users looking to move out of their current metros in search of more affordable homes.
With the combination of mortgage rates above 6% and inflation cutting into homebuyer budgets, 24.1% of those using Redfin.com looked to move to metros other than their current one during the three months ending in November.
That percentage is close to the record high set in summer 2022 and up from the pre-pandemic percentage of about 18%.
Home buyers are leaving expensive job centers
High mortgage rates and economic uncertainty, with inflation driving up other household costs, have discouraged many homeowners from moving, especially if they don’t have to. With a substantial percentage sitting on mortgage rates well below 6%, moving carries the likelihood of paying even more for their monthly mortgage.
Home sales are down more than 30% from a year ago. But among those who can still afford to move and are motivated to do so, one in four are looking at metros outside expensive job centers—because they can.
Despite their many attractions, the cost of living in these metros full-time has got more residents looking up more affordable metros and doing the math.
And with the rise of remote work, more homebuyers have the freedom and flexibility to choose homes in metros that are kinder to their household budgets, making it easier to build their savings and make savvy investments.
Per Redfin’s report, more buyers looked to leave San Francisco, Los Angeles, New York, Washington, D.C., and Chicago than any other city. This is based on the data for net outflow—the measure of how many more Redfin.users are looking to leave than to move into a metro.
The metros on the list below haven’t changed much over previous months since homebuyers typically leave pricey coastal areas in search of relatively affordable inland metros.
Top 10 metros homebuyers are leaving (by net outflow):
- San Francisco, CA
- Los Angeles, CA
- New York, NY
- Washington, D.C.
- Chicago, IL
- Boston, MA
- Detroit, MI
- Denver, CO
- Hartford, CT
- Seattle, WA
That said, compared to last month, the slow housing market and the lock-in effect have reduced the number of buyers looking to leave these metros. More people are choosing to sit tight, hoping mortgage rates will stabilize in the coming months.
Sun Belt metros are still popular destinations
Of the top ten markets with the highest net inflow—the measure of how many more Redfin.com users are looking to move into an area than to leave it—nearly all are still Sun Belt metros, which tend to be more affordable than the coastal job centers buyers are leaving.
Sacramento tops the list of the most popular migration destinations in November, followed by Las Vegas, Miami, Tampa, and San Diego. Fully half of the top ten metros by net inflow are in Florida, despite the recent devastation caused by Hurricane Ian.
The biggest reason, of course, is affordability. The typical home in eight of the top ten most popular metros is more affordable than in the metro most buyers are leaving (San Francisco). Seven of the top 10 are in areas with no state income tax.
And most are likely to get more sun in the months ahead (which doesn’t hurt).
Top ten metros homebuyers are looking to move into:
- Sacramento, CA
- Las Vegas, NV
- Miami, FL
- Tampa, FL
- San Diego, CA
- Phoenix, AZ
- Cape Coral, FL
- North Port-Sarasota, FL
- Dallas, TX
- Orlando, FL
Top takeaways for real estate agents
If you’re serving one of the markets seeing an influx of out-of-town homebuyers, make it easier for these newcomers to find you and give them a reason to see you as an authority in the area—one who is always willing to talk to them and share what you know.
If you’re working in an area buyers are looking to leave, look for ways to help these sellers get the best possible deals for their homes. Do what you can to make selling and finding a new home in a different metro as easy and affordable as possible.
