Nearly one-quarter of U.S. homebuyers looked to move to a different metro area in the three months ending in October. This is according to a new report from Redfin, the technology-powered real estate brokerage. Because homebuyers are struggling with high mortgage rates, inflation and a stumbling economy, they are seeking more affordable metros. And Florida tops the list in their searches. Of the top 10 cities homebuyers are moving into, five are in the Sunshine State.
Searches for homes in other cities on Redfin rose from roughly 18% in 2019. And many believe the prominence of remote work has a major impact on this trend. However, it’s not the only factor. Many Redfin users are seeking relative affordability as near-7% mortgage rates and persistently high home prices make expensive parts of the country even more expensive.
The average 30-year-fixed mortgage rate was 6.9% in October. Up 3.83 percentage points from 3.07% one year earlier—the largest year-over-year increase during any month since 1981. That has caused monthly mortgage payments for homebuyers to roughly double from a year earlier. And while rates have come down slightly in November, they’re still significantly higher than last year.
Sacramento, Las Vegas and Miami were the most popular destinations for Redfin.com users looking to relocate. Followed by San Diego and Tampa. Popularity is determined by net inflow. This is the number of people looking to move into a metro minus the number of people looking to leave. Not only is Florida home to the third-most-popular metro for relocation, but it hosts five of the ten migration destinations (Cape Coral, North Port-Sarasota, and Orlando also made the list).
Buyers seeking in the Sun Belt
Relatively affordable Sun Belt metros are typically most popular with relocating homebuyers. Largely because buyers can get more home for less money. In Las Vegas, for instance, the typical home cost $410,000 in October. Roughly half the price of the typical home in Los Angeles ($823,000)—the most common origin for people moving there.
More homebuyers looked to leave San Francisco, Los Angeles, New York, Washington, D.C. and Boston than any other major metro. That’s determined by net outflow. This is a measure of how many more Redfin.com users looked to leave an area than move in.
As Florida becomes a top migration destination, the state’s economy and housing market is expected to flourish in 2023 and beyond.