A record 32.6 percent of Redfin.com users looked to move from one metro to another in the second quarter, up slightly from 32.3 percent in the first quarter and from around 26 percent before the pandemic, according to Redfin report.
The housing market has slowed, with home sales falling and supply starting to rise due to rising mortgage rates, high home prices, inflation and a faltering economy. But people who can still afford to buy continue to relocate at unprecedented levels, largely because surging housing costs are putting expensive metros further out of reach. That makes relatively affordable places like Tampa, Fla., and San Antonio more attractive.
“The typical home in San Francisco or San Jose now costs more than $1.5 million. Add in today’s 5 percent-plus mortgage rates and you have a sky-high monthly payment,” Redfin Deputy Chief Economist Taylor Marr said in a 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.”
Miami was the most popular migration destination in the second quarter, unchanged from the first quarter, according to the Redfin report. Tampa, Fla., came in second, followed by Phoenix, Sacramento, Calif., Las Vegas, Cape Coral, Fla., San Diego, North Port, Fla., San Antonio and Dallas.
Migration into Florida continues to pick up, with net inflow into Miami, Tampa, Cape Coral and North Port higher than it was a year earlier. New York and Chicago are the most common origins of homebuyers looking to move into those metros.
“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,” Tampa Redfin Manager Eric Auciello said. “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.”
San Francisco had the highest net outflow of any major metro in the second quarter, unchanged from the first quarter. Net outflow is a measure of how many more Redfin.com users looked to leave a metro area than move in. Los Angeles, New York, Washington, D.C. and Seattle round out the top five.
It’s typical that homebuyers look to move out of expensive job centers, according to Redfin. As permanent remote work becomes the norm for many workers, even more homebuyers are moving out of those expensive cities than a year ago. Net outflow increased year-over-year in four of the five top places people are leaving. One exception is New York, where outflow is slowing.