Over a quarter or 25.1 percent of house hunters in the United States were seeking to relocate to a new metropolitan area in February, according to real estate company Redfin.
The interest to relocate registered at 22.9 percent in 2022, and approximately 18 percent prior to the pandemic. The latest number is a record high, indicating a housing market shift toward relocation owing to elevated mortgage rates, high property prices, decades-high inflation combined with economic uncertainty. Americans are looking to move to areas with cheaper homes and considering the rise of remote jobs, the relocation option is increasingly being considered.
Miami, Florida; Phoenix, Arizona; Las Vegas, Nevada; Sacramento, California, and other Sunbelt options were among the top destinations for house hunters.
The 30-year mortgage rate is 6.45 percent, as of March 29. It has largely remained the same, with slight variation, since the beginning of the year. However, it has increased over 93 percent from the start of 2022, when the rate was 3.33 percent.
Popular Destinations
With a net inflow of 8,300 in February, Miami remains the top spot for homebuyers. This was followed by Phoenix, with 6,700 inflows; and then Las Vegas (6,200); Sacramento (6,100); and Tampa, Florida, with 5,700 people coming in.“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,” said Redfin. “And the typical Phoenix home sold for $425,000, compared with $710,000 in Seattle, the most common origin.”
The other places making up the top 10 were Orlando and Cape Coral in Florida; Dallas, Texas; North Port-Sarasota, Florida; and Houston, Texas. Most of the people moving into these areas were from New York, Seattle, Los Angeles, San Francisco, and Chicago.
“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,” said Phoenix Redfin agent Heather Mahmood-Corley. “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.”
San Francisco topped the list of net outflows, with 30,300 people leaving in February. This was followed by New York with 21,100 outflows; Los Angeles, 19,200; Washington, D.C., 16,100; and Chicago, with 7,000 people moving out.
Mortgage Applications and Refinance Activity
The number of mortgage applications increased 2.9 percent over the previous week, on a seasonally adjusted basis, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ended March 24, 2023.“Application activity increased as mortgage rates declined for the third straight week. The 30-year fixed rate declined to 6.45 percent, the lowest level in over a month,” said Joel Kan, MBA’s vice president and deputy chief economist.
“While the 30-year fixed rate remained 1.65 percentage points higher than a year ago, homebuyers responded, leading to a fourth straight increase in purchase applications. Home-price growth has slowed markedly in many parts of the country, which has helped to improve buyers’ purchasing power.
“Purchase applications remain over 30 percent behind last year’s pace, but recent increases, along with data from other sources showing an uptick in home sales, is a welcome development.”
The Refinance Index also increased, rising 5 percent from the prior week. It was still 61 percent lower than the same week one year back.
“Most homeowners still have rates significantly lower than current levels, leaving only a small pool of borrowers with an incentive to refinance,” added Kan.
