Mortgage News March 13, 2023
A record percentage of homebuyers in the US are relocating to different metro areas as remote work and high housing costs drive them to seek more affordable destinations, according to a report by online real estate brokerage Redfin. In January, 24.9% of Redfin.com users across the country looked to move to a different metro area, up from 24.5% in Q4 2021, 22.8% a year ago, and 18% before the pandemic. High mortgage rates have caused many would-be homebuyers to back out of the market, but those who are buying are increasingly seeking relocation options. The typical monthly housing payment is now 26% higher than at the beginning of 2022 due to mortgage rates remaining close to a 20-year high, and home prices remaining elevated despite the cooling market.
People are considering more affordable places to live because of concerns about affordability and inflation. Even though home prices in popular migration destinations increased last year, they are still cheaper than the places people are leaving. For example, many homebuyers from Los Angeles are moving to Las Vegas and Dallas because homes are about half the price.
Miami was the most popular migration destination in January, according to the Redfin report, marking the first time the city had claimed the top spot since August. Half of the 10 most popular destinations are in Florida: Tampa, Cape Coral, Orlando, and North Port-Sarasota also made the list. Although homes in Florida are not cheap – the typical Miami home sold for $470,000 in January compared to the $383,000 national median – they are generally less expensive than the places people are leaving. The typical home in New York, for example, which is the top origin for homebuyers relocating to Miami, sold for $650,000 in January. Florida’s overall cost of living is also lower since it does not have a state income tax.
While Miami, Sacramento, Las Vegas, and Phoenix were the most popular destinations after Miami, fewer Redfin.com users looked to move to eight of the 10 most popular destinations than a year earlier, as overall homebuying demand has declined from its peak.
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