The recent migration increase in the United States is winding down, and new trends are emerging in where people are choosing to live. Here’s a closer look at the factors shaping these changes and the most popular destinations for movers today.
Migration Decline
In late 2023, the percentage of people planning to move fell to 23.9%, nearing pre-pandemic levels. This decrease is driven by several factors, including higher mortgage rates, limited housing inventory, and rising home prices.
Big City Exodus
Despite the slowdown in migration overall, large cities like Los Angeles, New York, and San Francisco continue to see a significant exodus of residents. The high cost of living in these areas is pushing people to seek more affordable places to call home.
Top Moving Destinations
Movers are now favoring places like Sacramento, Las Vegas, and various cities and beach towns in Florida. These locations are attractive due to their lower cost of living compared to the expensive metros people are leaving behind.
Less Remote Work Flexibility
The reduction in remote work opportunities is also contributing to the slowdown in migration. With more employers requiring employees to return to the office, the flexibility that allowed many to relocate during the pandemic has diminished.
Impact of Higher Mortgage Rates
Higher mortgage rates are another major factor keeping people in their current homes. Many homeowners are reluctant to sell and move because they would face higher rates on new mortgages, making it less financially feasible to relocate.
Historical Mobility Decline
The trend of declining mobility among homeowners isn’t new. Since the 1980s, more Americans, particularly older ones, have been choosing to age in place. A recent survey by the New York Federal Reserve found that most U.S. homeowners do not plan to move in the next three years.
Longer Homeowner Tenure
People are staying in their homes longer than before. The average tenure has increased from 6.5 years in the early 2000s to 11.9 years today.
What This Means for Real Estate Investors
For real estate investors, understanding these trends is crucial. The decline in migration and longer homeowner tenure could impact housing demand and market dynamics in various regions. Areas losing residents might see decreased demand, while affordable destinations could experience a surge in interest.
The migration boom may be ending, but the movement of people continues to reshape the housing landscape. By staying informed about these trends, real estate professionals can better navigate the shifting market and make strategic decisions for the future.
