A record number of homebuyers are relocating to more affordable areas as rising mortgage rates, high home prices, inflation and economic concerns are starting to make some areas of the country out of reach for buyers.
Redfin says a record number of its users, 32.6%, looked to move from one metro to another in the second quarter, which is up from 32.3% in the first quarter and 26% from before the start of the pandemic.
Those looking to buy a home in today’s market, despite rising mortgage rates, high home prices and inflation, are looking at relocating, as surging costs put more metro areas out of reach, making affordable locations much more attractive to buyers.
Redfin chief economist Taylor Marr says the typical San Francisco or San Jose home now costs more than $1.5 million, and when you add in today’s 5%-plus mortgage rates, monthly payments become sky high.
“Those factors, along with more companies giving employees the permanent flexibility to work remotely, are driving a larger portion of buyers to consider homes in other parts of the country,” Marr said. “Someone who would have to stretch beyond their budget in Los Angeles may be able to comfortably afford a home in Phoenix or San Antonio.”
Where are they going? Sun Belt metros seem to be a favorite.
According to the report, Florida is seeing more homebuyers move into the Sunshine State than a year ago, with Miami being the most popular migration destination, followed by Tampa, Phoenix, Sacramento and Las Vegas.