As the housing market continues to slow down across the country, many homeowners are relocating to housing markets that better suit their financial needs.
In fact, according to NerdWallet’s Home Buyer Survey an average 47 million U.S. residents moved each year from 2012 to 2016.
And among the 25 metros analyzed in the report, all but Chicago and New York posted a net resident increase from migration.
“There are a lot of factors to consider when trying to understand why people move to a new city, and why some from abroad look to make the United States their new home,” NerdWallet Expert Holden Lewis said. “While some of those reasons might seem obvious, like a lower cost of living or relocation for a new job, some factors may be less tied to finances, like wanting to live closer to family or in a more culturally diverse city.”
That being said, NerdWallet’s report indicates the most common factor behind homeowner migration is the request of a housing upgrade.
“More than one-third of people who had recently moved said they wanted a larger or better-quality home, according to the 2017 American Housing Survey by the Census Bureau,” NerdWallet writes. “Such upgrades don’t typically require big moves — heading down the street or into another neighborhood is often enough. But some may seek more dramatic changes and move to another state.”
For those migrating out of state, NerdWallet’s data points to affordability as the second biggest motivation for relocation.
“Even though upgrading is the most common reason people move, according to the American Housing Survey, 18% of recent movers say they left their prior residence to reduce housing costs,” NerdWallet writes.
So, what markets are these homeowners relocating to? Well, according to the analysis, Tampa and Phoenix.
These housing markets had the highest share of out-of-state new homeowners, sitting at a whopping 41%. This total even exceeds the national average of 32%.
“Often the cities that attract the most newcomers are the same places where people are forced to compete for living space,” Lewis said. “In these growing metros, if construction of affordable housing doesn’t keep pace with population growth, then rents and home prices will rise.”
And Lewis is right, as Nerdwallet revealed homeownership costs have priced out many of out-of-state newcomers, resulting in 68% settling into their new housing markets as renters.
NOTE: NerdWallet’s Home Buyer survey is based on data collected from The Harris Poll, which features the responses of 2,029 U.S. adults ranging from January 16th through 18th.