According to a new analysis from Redfin, 26% of the nation’s homebuyers are looking to move to a different part of the country, up slightly from 24% a year ago, and roughly 19% before the pandemic began.
Elevated mortgage rates still in excess of 7% have cooled the overall U.S. housing market, with fewer homes for sale and fewer buyers in the market. But a high portion of the homebuyers who are moving are relocating to different metro areas.
Redfin reports that there are 7% fewer users of its site looking to move away from their home metro than a year ago, compared to a 16.5% decline for those searching within their home metro.
Relocations are holding up better than in-metro moves, largely because homebuyers are searching for affordability, and remote work gives many Americans the freedom to move. Nine of the 10 most popular migration destinations have a lower median home-sale price than the most common origin of homebuyers moving in.
The most popular destination for relocating homebuyers recorded by Redfin was Sacramento, California, where the typical home sold for $575,000, nearly $1 million less than the typical home sold in San Francisco ($1,480,000), the most popular origin of buyers moving in. With a 7% mortgage rate–roughly the average for August–the monthly payment for the median-priced Sacramento home is $3,889, compared to $10,010 for the median-priced San Francisco home.
“Half of the buyers I’m working with are moving in from out of town, all but one from the Bay Area,” said Alison Williams, a Redfin Premier Agent in Sacramento. “Most of them are moving not necessarily because they cannot afford the Bay Area, but because they want a bigger home and better quality of life. They are searching for high-end homes with spacious yards where they can raise a family. I am also working with a few investors who are looking to buy a home here and rent it out for a few years before moving in themselves.”
After Sacramento, Las Vegas and three Florida metros–Orlando, North Port-Sarasota, and Tampa–are the most popular destinations for homebuyers looking to relocate.
Myrtle Beach, South Carolina climbed to number six after debuting on Redfin’s list of most popular destinations in July at ninth. Another Florida metro, Cape Coral, is also in the top 10.
Those metros listed above have a few things in common: They are more affordable than the most common origin of homebuyers moving in, and they face increasing climate risks. Sacramento and Las Vegas face severe heat risk, Orlando, North Port-Sarasota, Myrtle Beach, and Cape Coral face extreme wind/hurricane risk, while Tampa and Cape Coral are at extreme risk of flooding.
While research has shown that homebuyers consider climate risk when deciding where to live, affordability is often a more significant factor. A recent Redfin survey found that roughly 8% of U.S. residents likely to move within the next year are doing so because they are concerned about the impact of climate change on their previous area, compared with 22% moving for a lower cost of living.
Homebuyers are leaving San Francisco, New York, and Los Angeles more than any other metro in the country, based on net outflow, a measure of how many more Redfin.com users are looking to exit a metro than move in.
It is typical for expensive job centers to top the list of places homebuyers are moving away from, as those people seek more affordable housing. Homebuyers leaving Los Angeles, for instance, are most commonly moving to Las Vegas, where homes are half the price.