It’s Becoming Too Expensive to Live in Migration Hotspots
Redfin reports rising inflation in the Sun Belt is proving too much for many residents.
Americans are still on the move, crossing state borders and changing cities to move to where the warm weather and low tax rates beckon. But some of the most popular migration destinations for homebuyers—Phoenix, Tampa and Atlanta—have the highest inflation rates in the US, according to Redfin.
Redfin deputy chief economist Taylor Marr explained that not every part of the country is experiencing inflation the same way.
“It’s having an especially big impact in places like Tampa and Phoenix, which are attracting the most new residents and seeing double-digit increases in prices overall and even bigger increases in housing costs, Marr said in prepared remarks.
“We need to build more new homes in these Sun Belt hot spots to ease some of the competition for local homebuyers. That’s especially important as everyday costs like paying rent and buying food become more burdensome.”
In Atlanta, for instance, wages are up about 7% from a year ago but inflation is up 10% and asking rents are up 22%, he said. “That means it’s becoming more difficult to save for a down payment and break into homeownership even before you factor in sky-high home prices and rising mortgage rates.”
A potential bright spot, according to Marr, is that there’s an expectation that competition will slow in the coming months as mortgage rates rise and some buyers back out of the market, and wage gains are likely to continue increasing.
Meanwhile, inflation rates in San Francisco, New York and Washington, D.C., are among the lowest in the nation.