Homebuyers Relocate Because They Can’t Afford Local Prices

The demographic shift in the country has long been seen by experts as encouraged by money, or a lack thereof. Now there’s a suggestion from Redfin that income and expenses have more of an effect than previously thought.

“High mortgage rates, persistent inflation and economic woes are making expensive parts of the country less attractive and relatively affordable places more popular,” said Redfin in a study and found. Migration out of Los Angeles, New York, Washington, D.C. and Boston has picked up from last year.”

The study was based on two million people who use Redfin.com and “who searched for homes across more than 100 metro areas in July and August, excluding searches unlikely to precede an actual relocation or home purchase.” For inclusion, someone had to look at a minimum of 10 homes in a given geographic area and homes in that area were at least 80% of the user’s searchers.

About 33.9% of the sites uses fit the pattern, and so the company assumed they were looking to move from one metro region to another. In the second quarter, the number was 32.6% compared to a typical 26% before the pandemic. And it’s the share of those looking for homes—the overall number is down 20% from a year ago according to Redfin—that is the subject of inquiry.

The big outflow metro areas are San Francisco; Los Angeles; New York City; Washington, D.C.; Boston; Chicago; Detroit; Seattle; Minneapolis; and Denver.

The locations that would get the biggest influx are Miami; Sacramento; San Diego; Las Vegas; Tampa; Phoenix; Cape Coral, Florida; North Port, Florida; Portland, Maine; and San Antonio.

There are significant limitations of the methodology, like the inherent assumption that someone who undertakes a concentrated search is necessarily moving out of the area. Someone might be helping a person they know or looking at an area out of curiosity. Perhaps they saw mention of it in the news or on social media. Also, looking only at the search patterns of people who go to Redfin makes the sample self-selected. Data from website traffic measuring firm Semrush shows that Redfin had 78 million visits in August while Zillow had 322.6 million. The samples from the two sites could well differ, raising the question of how representative Redfin traffic alone would be of the nation.

And yet, many of those who want to buy a house would understandably find the combination of prices, mortgage rates about 6%, and general inflation putting a stretch on finances a challenge. Redfin did the study with its data, so there isn’t an immediate alternative.