Americans are bogged down by inflation and rising housing prices in major cities. They are seeking refuge in states with warm climates, low cost of living, and lots of job opportunities—like Florida, Texas, and the Carolinas. analysis of census data National Association of Realtors (NAR) shows which states lost residents and which gained population in 2022. The trends clearly indicate that many Americans are moving in response to affordability concerns.
migration patterns are changing
The decision to relocate is not an easy one, even when staying put becomes unaffordable. Although the pandemic provided opportunities for more Americans work remotely While fueling demand for more space, these conditions resulted in a modest increase in domestic migration, which has been declining for decades. In 2022, local migration will fall to a historic low Brookings Institute,
About 20% of Americans walked annually in the post-World War II era. This is because the US had a younger population with more renters and more single-earner households, making it easier for families to choose new jobs and relocate. By the early 2000s, the emigration rate had declined to between 13% and 14%, and the Great Recession reduced emigration even further.
rising mortgage rates Making migration in the second half of 2022 even less attractive. Homeowners who were able to secure mortgages at low interest rates during the pandemic home-buying boom had no incentive to flee. And pew research Note that fewer people are moving to urban areas where rents have risen sharply, reversing the urbanization trend.
But while overall migration is declining, long-distance migration is accelerating. Movement within counties increased in 2021-2022, as did migration between states. Long-distance movements may partially reflect trends Forced early retirement and voluntary attrition became prevalent during this time, as people took advantage of these changes to find better jobs or more affordable housing in other states.
Where are people going?
The six states with the most population growth in 2022 are Florida (+1.9%), Texas (+1.6%), North Carolina (+1.3%), South Carolina (+1.7%), Tennessee (+1.2%), and Georgia ( +1.2%). Arizona, Idaho, Alabama, Oklahoma and Nevada were also high on the list for inbound migration.
Could be part of the draw, according to the Tax Foundation low tax, But the reduction in mortgage or rent expenses in these states may outweigh those savings, especially those commuting from major urban areas like New York can enjoy. Fiscal Policy Institute reports That the average family that leaves New York saves 15 times more in housing costs than in tax costs.
NAR also used USPS data to identify migration trends among metro areas. The cities with the greatest inbound moving rates were also in the South and West. Some of the areas with the highest population growth include:
- Ocala, Florida
- Tallahassee, Florida
- Charlotte, North Carolina
- Savannah, Georgia
- Houston, Texas
- Dalton, Florida
- Myrtle Beach, South Carolina
- Huntsville, Alabama
- Miami, Florida
- McAllen, Texas
NAR noted that these Sun Belt regions experienced rapid job recoveries following the pandemic. On an average, there are about 5% more jobs in these sectors as compared to March 2020.
Where are people going?
As Americans find new homes in the South and West, they are leaving states that have high housing costs, high taxes and/or slow job growth. The states losing the most residents in 2022 were California (-0.3%), New York (-0.9%), Illinois (-0.8%), New Jersey (-0.1%), and Massachusetts (-0.1%).
Some of these states have urban centers with staggering real estate prices – the average selling price for a home in San Francisco is $1.275 million—while others were slow to recover from the pandemic. For example, only one metro area in Illinois has fully recovered its COVID-19 job losses, and only 86% jobs Recovered statewide through July 2022.
Residential rehabilitation is becoming more common
Housing has always been the primary reason that people move. They look for better neighborhoods, more space, and more affordable prices. but the census data shows Housing-related moves have become even more common during the pandemic, while the share of people moving for family-related or job-related reasons has decreased slightly. 46% of Americans moved in 2021 for housing related reasons, up six percentage points from last year.
Fewer people are migrating now than before. But those who are moving are moving away. As people struggle to find affordable housing in major cities that have historically been the most desirable places to live, we are seeing more population growth in the southern and western regions. Housing demand in these areas will eventually drive up housing prices, so investors can analyze migration trends to find areas with future growth potential.
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Note by BiggerPockets: These are the views expressed by the author and do not necessarily represent the views of BigPockets.
