Homebuyers Looking to Move to Relatively Affordable Places

People have been on the move within the US for years. Demographic changes have been clear and powerful, seeing residents and businesses shifting locations toward the South and West. It’s particularly true of homebuyers in the third quarter, according to a new Redfin report.

According to the firm, 24.2%, nearly a quarter, want to shift metro areas. In the second quarter, the number was 23.3%. In 2021’s third quarter, the figure was 21.6%. Before the pandemic, 18%.

The numbers are based on people doing searches on Redfin.com. The figures are net, so the number looking to move to a place, minus those leaving, are the net inflow. Similarly, those looking to move from a metro, minus those arriving, are the net outflow.

“To measure the share of homebuyers looking to relocate from one metro to another, Redfin calculates the portion of overall home searchers that are migrants,” the report says. “A Redfin.com user counts as a migrant if they viewed at least 10 for-sale homes in the third quarter and at least one of those homes was outside their home metro area.” The analysis is based on the searches of approximately two million Redfin users during the third quarter.

The company says that it has “recast its migration methodology to more accurately account for homebuyers searching outside their home metro in multiple other metros.”

As the data is based on searches, this is likely a metric with potential for errors. Someone might search out of curiosity. Others could be searching various metros and potentially contribute to the “moving there” count. Also, even with two million people, that is representative of Redfin’s user base and may not be nationally representative or accurate.

“Affordability is a priority for homebuyers as mortgage rates surpass 7%, more than doubling in the last year,” said the report. “Those high rates, along with inflation and still-high home prices, are discouraging many prospective homebuyers from moving. But those who are still in the market are likely to prioritize living somewhere relatively affordable, like Sacramento or Las Vegas. The uptick in remote work–more than one-third of American job-holders can work from home full time–means relocating for lower home prices is feasible.”

Many people were having difficulty affording a house before the pandemic. Now things are challenging enough that they’re affecting the home building industry with builder confidence sinking.

The destinations with the largest net inflow were Sacramento, Miami, Las Vegas, San Diego, and Tampa.

Some of these may sound surprising. Miami real estate has become increasingly expensive because of demand. And yet, that is relative. A Salary.com cost-of-living calculator shows that even with growing rents, living there would be 74.5% cheaper than San Francisco; 44.5% less than Washington, D.C.; 39.4 percent less than Boston, and almost 69% down from New York’s costs.