Exodus Trend Persists: Homebuyers Unfazed By High Mortgage Rates Leave Expensive Cities
A new report from real estate brokerage Redfin indicates that, despite elevated mortgage rates, homebuyers continue to leave expensive metro areas like New York and Seattle for more affordable housing options in cities like Miami and Pheonix.
Miami, Phoenix, Las Vegas, Sacramento, and Tampa were some of the most popular destinations for homebuyers to relocate from pricey cities such as New York, Seattle, Los Angeles, and San Francisco in February.
“Relatively affordable Sun Belt metros perennially top the list of places people are looking to move, due mainly to their comparatively cheap housing and warm weather,” Redfin wrote in the report.
Even though the homes in the cities with the most inflows last month were considerably more expensive compared with pre-pandemic prices, they remain comparatively affordable.
The typical Miami home sold for $485,000 in February, compared with $640,000 in New York, the most common origin for homebuyers looking to move in. And the typical Phoenix home sold for $425,000, compared with $710,000 Seattle, the most common origin. –Redfin report
For the Federal Reserve, which is trying to cool down the housing market, Phoenix Redfin agent Heather Mahmood-Corley has some troubling news:
“For buyers coming from the Bay Area or another expensive place, homes in Phoenix seem cheap. That’s why out-of-towners are still buying homes even though rates are high.
“Desirable, well-priced homes are selling quickly, sometimes with a bidding war–largely because there are still so many buyers moving in from out of town.”
Top 10 Metros Homebuyers Are Moving Into, by Net Inflow
Redfin noted homebuyers are leaving San Francisco, New York, and Los Angeles more than any other metro in February, followed by Washington, D.C., and Chicago.
Expensive coastal job centers typically top the list of places people are leaving. That trend became more pronounced in recent years as remote work allowed homebuyers to relocate to more affordable areas. –Redfin report
Top 10 Metros Homebuyers Are Leaving, by Net Outflow
While increasing mortgage rates have made home buying the most expensive in a generation, some folks relocating are unconcerned, as they are moving to areas with more affordable housing options.