Migrating Americans Are Driving Up Home Prices in Popular Metros

Popular metros and tech hubs are attracting droves of migrating Americans hastened by remote work flexibility and a reinvigorated economy, but a larger pool of regional buyers means major price hikes in some up-and-coming markets. Sun Belt cities like Phoenix, Dallas, and Orlando attracted the majority of relocating Americans in 2021, and as a result, prices for homes and consumer goods are reaching new highs.

According to Redfin, 31% of online users expressed interest in moving to another metro in 2021, up from 25.6% in 2019, before the start of the pandemic. In Phoenix, the average December home sale amounted to roughly $435,000, a 28% year-over-year gain, while the average monthly rental payment also increased at a similar rate of 26% year over year to $2,100.

Rapidly rising housing costs could slow the flow of Americans relocating to Phoenix and other Sun Belt cities. As the affordability gap narrows, some people may choose to stay in expensive coastal cities and others may opt for northern cities where homes are less expensive. 

Still, home prices in Phoenix remain roughly half that of many metros in coastal California—the typical Los Angeles home sold for $835,000 in December, for instance—so relocating to a state like Arizona, Texas or Florida remains financially advantageous for a lot of homebuyers and they will continue to attract relocators.

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