Since you could work remotely from anywhere, Americans were on the move during the COVID-19 pandemic. But that pattern has continued, according to new analysis just released by Bank of America Institute. The data shows that cities that experienced a lot of “domestic migration” (people moving within the United States) during the pandemic are still growing faster than other cities as of Q1 2023. And if you’re looking to buy a home, the report says housing prices are weakening.
Among the major metropolitan statistical areas (MSAs), which typically encompasses a city and its suburbs, Austin had the largest net population inflow during 2020-2021 and over the past four quarters. Other cities high on the list are Tampa and Orlando.
But while many people moved to Phoenix and Las Vegas during the pandemic, growth in both cities has slowed considerably.
And people are still leaving cities like San Jose, San Francisco, and New York, which experienced many people moving out during the pandemic.
Even though people are still flowing into some cities, housing prices are decreasing. The complete analysis suggests the lower housing prices are due to high mortgage rates and younger people who can’t afford to buy a home yet are moving to these cities.
However, the cost of rent is still high. For instance, in April, median rent payments for B of A customers in Austin, Orlando, and Tampa were up 11%, 14%, and 14%, year-over-year, respectively. This compares to the national average of 8%.
According to the most recent Home Buyers and Sellers Generational Trends report from the National Association of Realtors, baby boomers overtook millennials “as the generation with the biggest share of homebuyers” for the first time since 2014. The analysis attributes this to retiring boomers moving closer to family, demand for smaller homes, and the fact that boomers hold the most wealth of all the generations—$74 trillion, eight times that of millennials.
That said, millennials will most likely surpass boomers since they are currently renting and not buying due to home affordability concerns. Yet a B of A 2023 Homebuyer Insights Report reveals that while they may not be buying right now, millennials “are still actively scrolling through real estate marketplace apps.”
And remember that people who buy houses are typically also in the market for remodelers, construction companies, home furnishings and decor, and home services.