LOS ANGELES - Across the United States, the effects of inflation and a teetering economy are being felt by Americans everywhere from the grocery store and gas pump to Christmas tree lots and for homebuyers - the real estate market.
A new report by Redfin found nearly 24% of homebuyers looked to relocate to a different metro area in the three months ending in October. That's about the same as the record high 24.2% set in the third quarter, the report found, and up from about 18% in 2019, before the pandemic brought remote-work to the forefront, thus giving more American workers the flexibility to relocate.
The report found people are prioritizing affordability now more than ever as the U.S. housing market has cooled significantly during the second half of 2022 due to high mortgage rates, inflation and the economy.
RELATED COVERAGE: 2 California cities top list of places homebuyers want to leave: report
The average 30-year-fixed mortgage rate was 6.9% in October, up 3.83 percentage points from 3.07% one year earlier—the largest year-over-year increase during any month since 1981.
So where are people going to get the most for their money when it comes to housing?
Sacramento was the most popular destination for people looking to relocate, followed by Miami, Las Vegas, San Diego and Tampa. Popularity was determined by net inflow, which is the number of people looking to move into a metro minus the number of people looking to leave.
While Sacramento's $560,000 median sale price is higher than the national average, it’s a fraction of the $1.5 million median price in nearby San Francisco, the most common origin of newcomers to Sacramento, the report found.
"More than half of my buyers in Sacramento are from outside the area," said local Redfin agent Samantha Rahman. "They’re mostly remote workers coming from the Bay Area who may need to commute to the office a few times a month but are saving significantly on housing costs. It makes even more sense to relocate to a more affordable region now than it did when mortgage rates were low, as lower-priced homes offset some of the expense of high rates and rack up less interest."
On the other end of the spectrum, two California cities ranked as the top places people are looking to leave, according to the study. San Francisco and Los Angeles took the top two spots in that list. Those leaving San Francisco are flocking to Sacramento, while people leaving Los Angeles are choosing Las Vegas.
RELATED COVERAGE: People leaving Los Angeles are moving here in record numbers
Redfin's migration analysis was based on about two million Redfin.com users who viewed for-sale homes online across more than 100 metro areas from August 2022 to October 2022. To measure the share of homebuyers looking to relocate from one metro to another, Redfin calculated the portion of overall home searchers that are migrants.