As would be expected, given higher mortgage rates and high home prices, home buyers flocked to more affordable housing markets in 2023, a Zillow study of United Van Lines data shows.
Charlotte, Providence and Indianapolis saw the highest net in-migration among the 50 largest markets.
Meanwhile, Chicago, San Diego and Cincinnati witnessed the most outbound moves compared to inbound relocations.
Record-high housing costs in 2023 likely drove the continued trend of moving toward affordability, Zillow says.
Movers are also, increasingly, relocating to areas with more home listings per resident.
“Affordability is one of the biggest considerations for home buyers and sellers, and clearly plays a major role in deciding where to put down roots,” says Orphe Divounguy, senior economist for Zillow, in the report. ”Housing costs hit record highs last year, and made both buying and selling difficult, even for homeowners sitting on massive equity. Finding a less expensive area where dollars aren’t quite so stretched was a smart move for a lot of people.”
Affordability may improve slightly in 2024, Zillow says, but it has declined significantly over the past four years. The share of median household income needed to pay rent has risen from less than 27% in November 2019 to nearly 30% in November 2023.
The share of income needed for a monthly mortgage payment on a typical home purchase has risen even more dramatically, from about 23% to nearly 39% over the same period. In many places, especially the West Coast, costs are so high that a family making the median household income won’t even qualify for a mortgage.
United Van Lines customers have higher average household incomes than movers overall, but migration flows in the U.S. Census Bureau’s American Community Survey reveal a similar pattern. In 2021, the average interstate mover moved to a metro area where homes would save them about $10,000 when compared to where they came from; that’s in comparison to savings of a little less than $700 in 2019, before the pandemic.