BoA Real-Time Data Tracks Migration to Vegas, Tampa, Austin

Bank of America data suggests Baby Boomers are relocating to Las Vegas and Tampa while Millennials prefer Austin. Both groups are leaving the larger cities of San Francisco and New York.

These are not new trends, and BoA contends that its data is tracked in “real-time” and is “superior to any reports that the US Census issues.”

BoA’s analysis is based on the group of Bank of America customers who had open consumer checking, savings, credit, and/or other investment accounts for every quarter between 4Q 2018 and 1Q 2023. The migration pattern is then extracted based on customer home addresses.

BoA data as of Q1 suggests that cities that saw a large influx of people during the pandemic have still been growing faster than other cities in recent quarters.

For example, faster population inflow continues into sunbelt cities such as Austin and Tampa as post-COVID-19 migration trends are not reversing.

This, Despite Rising Home Prices

Home prices fell 3.1% YoY for May, according to the National Association of Realtors, the largest drop since December 2011, putting the median price at $396,100. High interest rates are pricing out many potential buyers and prompting homeowners with low rates on their current mortgages to stay put.

House prices are weakening even in cities with growing populations, BoA said.

“In addition to high mortgage rates that are dampening demand in the near term, the demographic composition also matters,” according to the report. For example, population inflows into Austin skew younger, which might be putting more upward pressure on rents instead of on home prices.

“Looking through the current housing downturn, local housing markets with more Millennial and Baby Boomer residents could see strength as the former enter prime home-buying age and the latter downsize their houses or move after retirement.”

At the opposite end, cities such as San Jose, San Francisco, and New York saw the biggest outflow of people during the early years of the pandemic and the rate of decline in 2023 continues to be the highest among major MSAs.

However, home price growth is slowing rapidly, according to data from Freddie Mac, even in cities with growing populations.

BoA said that in 2020 and 2021 when both housing inventory and mortgage rates were low, cities with the most inward migration such as Austin and Tampa also witnessed the biggest increase in home prices.

Home Price Depreciation in Population Growth Cities

But, as Fed rate hikes pushed up borrowing costs for these homes, demand dampened despite continued population growth in these popular cities, which has led to a correction in home price appreciation.

Today, the average cost of a monthly mortgage now exceeds $3,000 – coming in at $3,048 on a 30-year fixed mortgage, and $3,976 on a 15-year fixed mortgage, according to Personal Finance Insider. For most of the past 15 years, the average cost was below $2,000.

Rental prices remain strong in cities with a positive inflow of residents, BoA said.

“In addition to the fact that population increases lead to higher demand for rental units, low affordability in the home purchasing market has likely also pushed some prospective buyers into the rental market, leading to even more upward pressure on rent levels,” according to the report.