A record one-quarter-plus (25.5%) of homebuyers nationwide looked to move to a different metro area in Q2, according to a new report from Redfin, a total that is up from 23% a year earlier, and nearly 19% before the pandemic.
Despite the record share of homebuyers relocating, there are fewer relocators than there were a year ago, as high mortgage rates in the 7% territory have cooled the overall housing market. According to Redfin, the number of Redfin.com users moving to a different metro is down 7.5% year-over-year, a record decline, but much smaller than the 18% decline for those staying within their current metro area.
The study, authored by Redfin Data Journalist Dana Anderson, found Las Vegas as the most popular destination for relocating homebuyers in the second quarter of 2023, topping Redfin’s list for the first time. Buyers with the freedom and inclination to relocate are choosing Las Vegas largely because their money goes a long way there: Its typical home sells for $412,000, less than half the price of a home in Los Angeles, the most common origin for buyers moving to Las Vegas. It’s a similar story for the other popular migration destinations, which include Phoenix, Sacramento, and several Florida metros.
Today’s elevated mortgage rates have changed the dynamic of the overall housing market, as high rates have slowed the market significantly since the pandemic homebuying frenzy, which was driven by record-low rates and remote work, but they have also upped the appeal of relatively affordable metro areas.
Following Sin City, Las Vegas; Phoenix; and Tampa, Florida were the most popular destinations for Redfin.com users moving to a different metro area. Popularity for this analysis was determined by net inflow, a measure of how many more Redfin.com users looked to move into an area than leave.
Five of the 10 most popular destinations were in the state of Florida—all locations with warm climates, and many facing an increased risk of natural disasters like flooding and heat.
Nine of the 10 most popular destinations have lower median sale prices than the most common origin of buyers moving in, and many homebuyers are more motivated by affordability than other factors in choosing where to live.
In terms of metros where people are exiting, homebuyers are leaving San Francisco, New York, and Los Angeles more than any other metro in the country. That’s based on net outflow, a measure of how many more Redfin.com users are looking to leave a metro than move in.
Several other expensive job centers, including Washington, D.C. and Boston, are also among the 10 metros where homebuyers are most apt to leave … largely for the same reasons described above as homebuyers are leaving expensive places in favor of areas with more affordable housing, which is made possible by remote work opportunities. San Francisco’s median sale price comes in at more than $1.4 million, the highest in the nation, and more than double the $600,000 median sale price in both Portland, Oregon and Austin, Texas, two of the 10 most popular destinations for homebuyers leaving San Francisco.
Click here for more information on Redfin’s Q2 migration report.
