(NEXSTAR) – A combination of economic uncertainty, high valuations and rising mortgage rates is driving Americans in some US cities to want to move en masse, according to research from real estate brokerage Redfin.
An analysis of user data found that expensive coastal cities topped the list of places residents were looking to get away from during the summer, with San Francisco, Los Angeles and New York topping the top 10, respectively.
“The overall slowdown and the popularity of relocation are both due to high house prices and mortgage rates which have doubled since last year,” said Redfin deputy chief economist Taylor Marr. “The 6% mortgage rates are exacerbating already high home prices and causing homebuyers – especially remote workers – to leave expensive areas for more affordable areas. Persistent inflation and collapsing inventories are also squeezing buyers’ budgets, making relatively affordable areas even more attractive.
People are leaving, but for where?
The study also broke down the top destination as well as the top out-of-state destination for cities with the highest net outflow, based on user data.
For residents of San Francisco, the first destination was Sacramento. San Franciscans ready to leave the Golden State considered Seattle the first out-of-state destination.
For Angelenos, San Diego was the top destination with Las Vegas the top out-of-state destination. New Yorkers were aiming for a new home in Philadelphia more than any other city, including New York.
The rest of the top 10 cities most Americans seek to leave had the same primary destination and the same out-of-state destination. They are, in order, Washington DC (Salisbury, Md.), Boston (Portland, Maine), Chicago (Los Angeles), Detroit (Cleveland), Seattle (Los Angeles), Minneapolis (Chicago) and Denver (Chicago) .
Redfin says the number of buyers looking to move is the highest since the company started tracking migration data, but the housing market as a whole has cooled after its frenzied peak during the pandemic.
Sales of existing homes fell for the seventh straight month in August, the National Association of Realtors said Wednesday. Compared to August of last year, the drop is 19.9%.
NAR chief economist Lawrence Yun said he doesn’t see the trend changing in the coming months, and possibly not for a few years.
“Some homeowners are unwilling to trade up or down after locking in historically low mortgage rates in recent years, increasing the need for new home construction to boost supply,” Yun said. “Rising mortgage rates have clearly hampered the housing market.”
What are the most popular destination cities?
As for the cities most targeted by homebuyers looking to move in July and August, rising mortgage rates and economic concerns appear to have played a role.
Eight of the 10 most popular cities have median sale prices below $500,000. Six of the 10 are located in states with no income tax.
Another trend in terms of the most targeted relocation cities was the weather: nine out of ten cities are known for their warm temperatures.
The study found that the top 10 cities people were looking to move to were, in order, Miami; Sacrament; San Diego; Vegas; Tampa, Florida; Phoenix; Cape Coral, Florida; North Port, Florida; Portland, Maine; and San Antonio, TX.
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