Homebuyers, Renters Still Migrating to Other States Even as the Pandemic Recedes

More homebuyers than ever are looking to move to a different part of the country, according to a new report from Redfin.

More than one-quarter (25.8%) say so, up from 23.7% a year ago, marking a steady rise since the pandemic, based on Redfin.com users. The share was roughly 18% in 2018 and 2019.

“While a record share of homebuyers is looking to relocate, the number is lower than it was a year ago as the frequency of homes changing hands drops to its lowest level in at least a decade amid the cool housing market,” Redfin’s research showed.

There are 7% fewer Redfin.com users looking to move away from their home metro than a year ago. That’s compared with a 17% decline for Redfin.com homebuyers staying in their hometown.

Jeff Taylor, managing director of Mphasis Digital Risk, in Maitland, Fla., tells GlobeSt.com that Fannie Mae shows 67% of consumers say they would buy a home if relocating, compared to 33% who said they’d rent if relocating.

Metros in the Sun Belt and Florida are the most popular destinations despite the increasing risk of heat, hurricanes, and flooding.

Las Vegas tops the list for the second consecutive month, followed by Sacramento, Tampa, North Port-Sarasota, and Cape Coral.

Homebuyers are leaving San Francisco, New York, and Los Angeles more than any other metro in the country.

The rise of remote work has a lot to do with it, Charles Goodwin, Senior Director at Kiavi, tells GlobeSt.com, “Many Americans now can migrate from large, high-cost cities like New York, Los Angeles, San Francisco, and Seattle to smaller metro areas with a lower cost of living. 

“The ability to work remotely from a lower-cost area enables these Americans to achieve their version of a higher quality of life, including more affordable housing with larger homes and yards. 

“To meet the demand for housing in these new migration hotspots, we are seeing residential real estate investors gravitating toward both affordable Midwestern markets like Indiana and Missouri as well as cities like Tampa, Orlando, Dallas, and Houston where they can get higher yields on both fix-and-flip projects and rental properties.”

Another notable trend is the search for affordable housing, Cadre’s Managing Director of Investments Chad Thomas tells GlobeSt.com, as well as the job growth in business-friendly locales.

“Affordable real estate makes these markets attractive for both individuals and companies seeking to make their dollars go further,” Thomas said.

A lot of these people, though, are opting to rent as the cost of home ownership is skyrocketing all over the U.S. thanks to record-high mortgage rates. Cadre recently performed an analysis on the delta between the cost to own and the cost to rent, finding it is at its widest point in history. 

In July, the monthly costs to buy a home were about 62% more expensive than renting, it said. 

“Looking ahead, we expect to see consistently higher demand to rent, and population flows to follow strong job growth more closely. For investors, this means looking at long-term demand drivers and continuing to track housing trends at the micro market level,” Thomas said.

That is not to say that homebuyers have given up. Taylor Morrison Charlotte Division President, Andrew Bodary, tells GlobeSt.com that his market continues to prove itself as a hotbed for in-migration for relocating buyers.

“Like many new home builders, we have adjusted our operating style to carry more unsold inventory to better meet the needs of the incoming population. This has served us well in the last few years, particularly as available resale housing inventory continues to shrink given rising mortgage rates.”