Homebuyers are increasingly moving to affordable places within the country as U.S. mortgage rates crossed the 7 percent mark last month and decades-high inflationary pressures cut into real incomes.
According to Seattle-based real estate brokerage Redfin, homebuyers are looking to move into Sacramento, Las Vegas, and Tampa, with the biggest outflows seen in San Francisco, Los Angeles, and New York City. A record-high 25 percent of American homebuyers were planning on shifting residences to cheaper metropolitan areas during the third quarter of 2022, said the company. That’s an increase of 23.3 percent from the second quarter, 21.6 percent from 2021, and about 18 percent from pre-pandemic.
Top American Cities for Buying Homes
The top five cities preferred by homebuyers in the United States looking to relocate are Sacramento, Miami, Las Vegas, San Diego, and Tampa.The top five cities with net outflows are San Francisco, Los Angeles, New York, Washington, D.C., and Boston. The top destinations preferred by the people leaving are Sacramento and San Diego, California; Miami, Florida; Salisbury, Maryland; and Portland, Maine.
Homebuyers prefer to move away from expensive, coastal cities to places with warmer weather and affordable properties.
Spiking Interest Rates
Some experts expect mortgage rates to climb even higher, which would put more pressure on the housing market. Rick Sharga, executive vice president of Market Intelligence for ATTOM, expects the 30-year rate to potentially touch 8 percent this month.Data from the U.S. Bureau of Labor Statistics show that the annual Consumer Price Index has remained above 7.5 percent for every single month this year. It peaked at 9.1 percent in June, and was at 8.2 percent in September. This is the highest inflation seen in the country since 1982.