The number of Redfin.com users nationwide who looked to move from one metro to another reached an all-time high in the second quarter of this year, spurred by rising interest rates and still-swelling home prices in already expensive markets.
The online real estate brokerage reported that 32.6% of its users ran searches in metros outside their home metro area. This share was up from the previous high point of 32.3% set in first-quarter 2022 and well above the 26% pre-pandemic level.
This year’s records for out-of-metro search share surpassed even the peaks reached during the height of the COVID-19 pandemic, when lower prices in nearby areas, the popularity of remote work, and a desire for more space and less density prompted an exodus from many large, crowded and pricey cities.
The residential real estate market has entered a much more subdued period since then, but those who can still afford to buy are continuing the trend. Many people have been pushed out of homeownership in their local areas due to surging housing costs but have been attracted to increased affordability in relatively less expensive places such as Tampa, Sacramento and San Antonio.
“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,” said Redfin deputy chief economist Taylor Marr.
“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.”
Gauged by net inflow (how many more Redfin users looked to move into an area rather than leave), Miami was the most popular migration destination during the second quarter, holding on to the top spot from the first quarter. Next on the list were Tampa, Phoenix, Sacramento and Las Vegas.
Florida cities are receiving a lot of attention from homebuyers in New York and Chicago, Redfin reported. Meanwhile, San Diego and San Antonio are seeing net inflow increases, with Los Angeles a common origin for homeseekers moving to these cities. Notably, some cities that have been longstanding beneficiaries of the trend away from coastal gateways have seen their net inflow slow down from 2021.
Phoenix, Sacramento, Las Vegas and Dallas have seen inflow decelerate, partially because they’ve been buyer destinations for so long that prices there have become far less affordable. Although they remain more affordable than, say, New York or the San Francisco Bay Area, prices in Phoenix and Las Vegas, for example, have risen a respective 20% and 23% over the past year.