Fewer people are moving, but those who are seek new communities
The latest Redfin report finds that while moving is down overall, a higher percentage of those who move are relocating to other parts of the U.S.
Key points:
- Florida remains a popular destination for buyers.
- Movers are still leaving expensive coastal metros like San Francisco, Los Angeles and New York, but at lower levels.
- Out-of-town buyers are more likely to pay in cash, making it hard for local buyers to compete.
As the housing market has slowed, so have the number of moves — but a higher percentage of those who do opt to move are heading to different parts of the country.
That's the latest finding from Redfin, which used data from Redfin.com users to analyze moving patterns. The number of in-town moves is down 17% in April compared to a year ago, while the number of out-of-town moves is down 6%. The percentage drop for in-town moves is the biggest in Redfin's records, which goes back to 2018.
The share of Redfin users who are looking to relocate is now 25.2%, a record for the study. That's up from 22.8% a year earlier, and a big jump from the pre-pandemic share of 19%.
The report noted a few reasons why out-of-town moves are slowing less dramatically compared to in-town moves: People are looking for more affordable places to live, and the rise of remote work is making it possible.
Also, despite the challenges of high interest rates and low inventory, people are still moving to take a new job or care for a family member, and that usually happens in another city. In-town moves are more likely a result of buyers looking for a different home size or layout.
According to the National Association of Realtors, the most common reason for a long-distance move is to be closer to family, followed by retirement and living closer to a job or school.
Florida, Sun Belt region remain hotspots
Florida continues to be a prime destination for movers, although the pace of migration has slowed compared to a year ago. Five of the top 10 communities people are moving to are in the Sunshine State. Miami tied with Phoenix for the top spot, followed by Las Vegas.
San Francisco, New York City and Los Angeles continued to lead the list of cities people are leaving. The net outflow was lower than last year for all three cities, however.
A separate report from Freddie Mac showed several similar trends. Using its loan application data, Freddie Mac found Florida metros also dominating the list of communities people are moving to. Interestingly, the Riverside, California metro area topped the list of places to move to, while Miami landed on the list of places people are moving out.
Freddie Mac's research also found income-level differences among movers. Lower-income households are 25% less likely to move out of the 25 largest metro areas than middle- and upper-income households.
Competition from movers creating challenges for local buyers
The relocation trend has made destination markets more competitive, according to the Redfin report.
"About half of the people buying homes here are from out of town, and some are able to pay cash," said Orlando Redfin Premier agent Nicole Dege.
"That's making it difficult for some locals to get their offers accepted, especially because many people have limited budgets due to high mortgage rates and there are so few homes coming on the market. Even though fewer people are coming in from out of town, there are also fewer homes for sale."