The correlation of migration, home prices and inflation rates is crystal clear…the greater the migration influx, the higher the home prices and inflation rates.
Popular Migration Destinations – Fastest Rising inflation Rates & Home Prices
A new study by Redfin indicates that popular migration destinations saw over-size inflation rates during Q4 2021.
According to Redfin Deputy Chief Economist Taylor Marr, “Migration is one reason among many why the cost of everything from food to fuel is rising. An influx of people moving to a popular, relatively affordable place like Atlanta increases demand for housing and transportation, pushing up prices on those things and to soaring prices on everything else, from food to utility bills.”
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Nationally, inflation jumped up to 7.5% y/y in January 2022, the highest level in nearly 40 years.
Take a look at how the national inflation rate compared with the inflation rates in popular migration spots.
Popular Migration Destinations with Relatively High Inflation Rates
Atlanta Phoenix Tampa
Inflation Ranking #1 #2 #3
Inflation Rate, Y/Y 8.9% 8.4% 8%
Ranking @ Metro Influx #10 #2 #5
Median Sale Price $350K $435K $338K
Y/Y Increase +22.8% +28% +24.3%
Average Monthly Rent $2,016 $2,107 $2,076
Y/Y Increase +12.1% +26% +28.1%
Places with Relatively Low Migration Rates have Relatively Low Inflation Rates
Redfin’s Deputy Chief Economist Marr said, “A person moving from New York City to Atlanta will probably enjoy lower housing costs in their new hometown.” Marr added, “Residents moving away and less demand for goods and services is one reason why inflation is lower in places like New York and Los Angeles.”
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Take a look:
San Francisco New York Los Angeles
Inflation Ranking #3 #22 #17
Inflation Rate, Y/Y 4% 4.6% 6%
Net Outflow 48,904 27,769 39,586
Median Sale Price $1,488,000 $640,000 $835,000
Y/Y Increase +10.3% +8.5% +14.4%
Average Monthly Rent $3,520 $3,718 $3,394
Y/Y Increase +6% +34.5% +9.6%
Going Forward?
Though more and more Americans, 31.2%, are showing significantly more interest in relocating compared to pre-pandemic relocating interest, 26%, due primarily to remote work opportunities, Redfin believes that the current financial advantages of living in places such as Tampa and Phoenix is likely to fade.
Why? Marr said, “The flow of people moving from traditionally expensive cities to more affordable areas will slow down because, quite simply, prices are rising so fast that those places won’t be as affordable anymore.”
Need proof? Austin TX.
Thanks to Redfin.
