The impact of the pandemic on homebuyer migration patterns is waning – but with higher mortgage rates and limited inventory, people aren’t exactly flocking back to the cities, either.
As a result, the share of U.S. homebuyers looking to move to a new metro area fell for the third straight month in November, dropping to 23.9%, according to Redfin.
That’s the lowest share in a year and a half.
A year ago, the share was 24.1%. November marked the first month the share fell on an annual basis in Redfin’s records.
Overall, homebuying slowed in 2023 because it was the least affordable year on record and there was a severe supply shortage, the firm says.
There were 4% fewer Redfin.com users looking to move to a new metro in November than a year ago, compared with a 3% year-over-year drop for Redfin.com users searching within their home metro.
The slightly bigger drop for house hunters looking to relocate explains why migrants are making up a smaller share of overall home searchers.
The portion of house hunters who are relocating to a new area is coming down for a few reasons, Redfin says.
One, there’s less flexibility to work remotely as employers call workers back to the office. That means the flow of homebuyers moving from the Bay Area to Austin or Boise, for example, has slowed.
Two, home prices generally increased more in popular migration destinations than they did in expensive coastal metros during the pandemic, making the case for moving a bit less compelling. For example, prices in Sacramento – the most popular destination this month – are up about 35% since before the pandemic, compared with an 8% increase in the Bay Area.
Still, the migration rate remains above pre-pandemic levels of around 19% as some Americans are still chasing affordability. All 10 of the most popular migration destinations have lower prices than the most common origin of buyers moving in.
Photo: Leo