​Areas With High Migration Finding High Inflation

Inflation continues to affect movement patterns across the country and these changing demographics can affect local businesses, according to a new report from Placer.ai.

For 2021 and 2022, Sunbelt states like Arizona and Florida and states with lower population density such as North Dakota, Montana, and Wyoming, continue to see positive net migration. Meanwhile, the negative net migration out of states dominated by larger cities – such as California and Illinois – continued.

People with higher median household incomes continued to move to areas with lower household incomes.

“States experiencing high migration rates tend to see high inflation levels – perhaps due in part to newcomers coming from states with higher incomes and driving up costs locally,” according to the report.

But many metros with high inflation still boast a lower-than-average cost of living, and the high local inflation does not seem to be tempering inbound migration to these areas.

As a bonus to consumers, many of the states with lower household incomes also have lower – or no – income taxes, which could help to offset inflationary pressures.

Also worth noting, for states such as Florida and Arizona, migration patterns may be influencing inflation rates. States experiencing high rates of migration also see some of the highest levels of inflation.

The “work from anywhere” crowd also is playing a role, with many people no longer commuting to the office five days a week, many are relocating to areas where their dollar can go further.

“And, in turn, the inbound migration to these affordable regions seems to be driving economic growth and creating new employment and commerce hubs,” according to the report.