The housing market has been slowing down because of higher mortgages, interest rates and a red-hot inflation. Now, new homebuyers are also choosing to relocate as housing costs are becoming too excessive in certain cities.
A new Redfin survey finds that a record 32.6% of Americans looked to move from one metro to another in the second quarter of 2022, up from 32.3% in the first quarter and way up from 26% before the pandemic.
“The typical home in San Francisco or San Jose now costs more than $1.5 million. Add in today’s 5%-plus mortgage rates and you have a sky-high monthly payment,” Redfin Deputy Chief Economist Taylor Marr said in a press release.
“Those factors, along with more companies giving employees the permanent flexibility to work remotely, are driving a larger portion of buyers to consider homes in other parts of the country. Someone who would have to stretch beyond their budget in Los Angeles may be able to comfortably afford a home in Phoenix or San Antonio,” Marr added.
So, which cities are experiencing the highest outflow of homebuyers?
San Francisco had the highest net outflow of any major U.S. metro in the second quarter, unchanged from the first quarter, Redfin notes. The top destination for people relocating in the state was Sacramento, while those who relocated out of state mostly went to Seattle.
Los Angeles followed, with people mostly moving in-state to San Diego or out-of-state to Phoenix, Arizona.
Rounding out the top 10 cities that saw the most homebuyer departures, according to the survey, were:
- New York
- Washington, D.C.
In terms of which cities saw the most inflows, Miami was the most popular migration destination in the second quarter, as it was in the first quarter of 2022. According to the survey, the most common origin city of homebuyers looking to move there was New York.
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Tampa came in second, followed by Phoenix, Sacramento, Las Vegas, Cape Coral (FL), San Diego, North Port (FL), San Antonio and Dallas.
“Tampa is still attracting a lot of out-of-state homebuyers, coming from places like New York, who can get more for their money in Florida,” said Eric Auciello, a Redfin manager in Tampa. “The spike in mortgage rates has priced some buyers out of the market, but it has also helped ease competition and curb bidding wars between locals and out of towners. A lot of buyers who kept getting outbid at the peak of the market are now getting their offers accepted, and in some cases they’re even able to use FHA loans, make smaller down payments and keep the appraisal contingency.”
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