Lower housing costs — not jobs — are driving intercity moves

As a result of the pandemic, lower housing costs have become the primary motivator for long-distance moves as opposed to employment reasons, a Freddie Mac research paper found.

But relocation of any distance was at a 73-year low in 2021, according to U.S. Census Bureau data cited by Freddie Mac.

Last year recorded the lowest percentage of people changing their residence since 1948, the first year this information was collected, as 8.4% of the population moved, down from 11% in 2017.

Most moves are within the same local region. But last year 27.1% of movers left their current metro area for another one (or for a non-metro area). That's 3.8 percentage points higher than for 2017.

Over the last 24 years, housing-related reasons like wanting to own a home, wanting a larger home or wanting cheaper housing were the main factors behind shorter distance moves. Employment-related reasons were the main factors behind longer distance moves, but remote work reversed those trends in 2021.

With that in mind, Freddie Mac then looked at applications for owner-occupied mortgages submitted to Loan Product Advisor between January 2000 and this February.

"Interestingly, as of February 2022, while the pandemic seems to be abating and people are returning to some form of hybrid work, inflows into the remaining midsized metro areas and less populated places remain elevated," Freddie Mac said. "The persistence of the trend seems to suggest some form of suburbanization may be here to stay, which would have major implications for our economy, society and culture."

Areas with the highest homebuyer net migration losses have occurred in high-cost markets in coastal areas, while those with the most gains were more inland and in the South.

"In 2021, the Freddie Mac House Price Index reported that while house price appreciation rose to historical highs in the United States, the fastest rise occurred for those metro areas which experienced a surge of migrant homebuyers," the paper said.

The median home price on loan applications submitted to Loan Product Advisor in February for the top 10 destinations on average was $128,000 less than the median home price from the leading metro of origin. However, prices in No. 10 inbound destination North Port-Sarasota-Bradenton, Florida were $68,000 higher than the leading feeder area, Tampa-St. Petersburg-Clearwater, Florida. Ironically, North Port reported the nation's highest year-over-year price growth in May, followed by Tampa, according to Redfin.

Meanwhile, for the top 10 metros with the highest migration, the median home price in those locations exceeded that of the destination by an average of $144,000.