The housing market may be cooling off, but that doesn’t mean buyers can afford homes where they live. Sometimes, the only way to find a home that fits your budget is to pick up and move.
That's exactly what many people are doing: As home prices continue to rise despite falling demand and sales, more buyers than ever are looking to relocate. According to new analysis from real estate brokerage Redfin, 32.6% of its users looked to move to a new city last quarter. It's a slight increase compared to the first quarter of 2022, when the figure was 32.3%, and it's the largest share of searchers looking to relocate since the firm began tracking this metric in 2017.
Before the pandemic, about 26% of Redfin users searched for homes outside their own cities in a given quarter. Redfin excludes searches that it determines to be unlikely to lead to an actual home purchase.
Top 10 cities people want to flee
Here are the top 10 cities where buyers who want to leave outnumber those looking to move in, based on Redfin's analysis of searches on its platform. As you can see, many of the places people are eager to flee are among the most heavily populated and expensive metro areas in the U.S.
- San Francisco, California
- Los Angeles, California
- New York, New York
- Washington, D.C.
- Seattle, Washington
- Boston, Massachusetts
- Detroit, Michigan
- Denver, Colorado
- Chicago, Illinois
- Minneapolis, Minnesota
San Francisco saw the largest gap between people looking to leave and those looking to move in during the second quarter of 2022. Among Redfin’s sample of two million users, more than 45,000 more people looked to leave the city than move in. High home prices probably factored in to that trend.
“The typical home in San Francisco or San Jose now costs more than $1.5 million,” Redfin Deputy Chief Economist Taylor Marr said in a news release. “Add in today’s 5%-plus mortgage rates and you have a sky-high monthly payment.”
Marr says those high borrowing costs, along with new opportunities for remote work, are among the top reasons more homebuyers are exploring options in more affordable cities.
It’s no coincidence that rent prices in these cities are sky-high too. When both buying and renting are prohibitively expensive, moving to a cheaper city can be the best option.
A one-bedroom apartment cost an average of $3,572 in San Francisco in June, according to a recent report from Rent.com. The average one-bedroom in New York City cost $5,812 in June, the report found, representing a year-over-year increase of an eye-watering 41%.
Where are people moving to find affordable homes?
Redfin found that the top destinations for homebuyers looking to relocate include Miami, Florida; Tampa, Florida; Phoenix, Arizona; Sacramento, California; and Las Vegas, Nevada. Even though many Sun Belt cities have exploded in popularity and seen steep price increases during the pandemic, they're often still affordable compared to places like Boston and Los Angeles.
A June report from Freddie Mac backs up the idea that people are seeking more affordable spots to buy homes. The company found that between March 2020 and February 2022, the most popular cities for out-of-town homebuyers were concentrated in “affordable interior markets and Southern beach destinations” like Dallas, Phoenix and Tampa.
For many people, purchasing a home in those Sun Belt cities means saving some serious cash compared to buying in their current cities. The median home price on loan applications in the places gaining the most out-of-towners was $128,000 lower than the median price in those buyers’ cities of origin, according to Freddie Mac.
Unfortunately, buyers looking to relocate shouldn't count on saving money across the board. Popular Sun Belt cities are also home to some of the highest inflation rates in the country, Redfin found earlier this year.
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