(NEXSTAR) – A combination of economic uncertainty, lofty valuations and rising mortgage rates has Americans in some U.S. cities looking to relocate in droves, according to a study from real estate brokerage Redfin.
An analysis of user data revealed that pricy, coastal cities were high on the list of places residents who sought to leave over the summer, with San Francisco, Los Angeles and New York leading the top 10, respectively.
“The overall slowdown and the popularity of relocating are both due to high home prices and mortgage rates that have doubled since last year,” said Redfin Deputy Chief Economist Taylor Marr. “Six percent mortgage rates are exacerbating already-high home prices and motivating homebuyers — especially remote workers — to leave expensive areas for more affordable ones. Persistent inflation and slumping stocks are also cutting into 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 the cities with the highest projected net outflow based on user data.
For San Francisco residents, the top destination was Sacramento. San Franciscans ready to call the Golden State quits eyed Seattle as the top out-of-state destination.
For Angelenos, San Diego was the top destination, with Las Vegas the top out-of-state destination. New York City residents targeted a new home in Philadelphia more than any other city, including in New York.
The rest of the top 10 cities most Americans are looking to leave had the same top destination and top out-of-state destination. They are, in order, Washington D.C. (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 relocate is the highest it’s been since the company started tracking migration data, but the housing market as a whole has cooled from its frenzied peak during the pandemic.
Existing home sales dipped for the seventh straight month in August, the National Association of Realtors said Wednesday. When compared to August of last year, the drop is a whopping 19.9%.
NAR Chief Economist Lawrence Yun said he doesn’t see the trend changing in the coming months, and maybe not for a couple of years.
“Some homeowners are unwilling to trade up or trade down after locking in historically-low mortgage rates in recent years, increasing the need for more new-home construction to boost supply,” Yun said. “The rising mortgage rate has clearly hampered the housing market.”
What are the most popular destination cities?
When it comes to the cities most targeted by home buyers looking to relocate in July and August, rising mortgage rates and economic concerns did appear to play a role.
Eight of the 10 most popular cities have median sales prices below $500,000. Six of the 10 are located in states with no income tax.
Another pattern when it comes to the most-targeted relocation cities was the weather: nine out of 10 are known for their warm temperatures.
The study found that the top 10 cities people were looking to move to were, in order, Miami; Sacramento; San Diego; Las Vegas; Tampa, Fla.; Phoenix; Cape Coral, Fla.; North Port, Fla.; Portland, Maine; and San Antonio, Texas.