World Stock Watch

Migration Patterns Shift as Housing Market Cools Down

The allure of Sun Belt states is still strong, but the pace of migration has slowed significantly, according to the latest U.S. Census data. For the year ending July 1, 2024, top destinations like Texas, North Carolina, South Carolina, and Florida saw a substantial decline in domestic migration.

A Closer Look at State-to-State Migration Trends

To track these trends, the U.S. Census Bureau relied on data from the American Community Survey and anonymized IRS address changes. Interestingly, states that have consistently experienced a net loss of residents, such as New York and California, saw fewer people leaving – suggesting a broader slowdown in migration.

New York and California See Decline in Net Losses

New York, for instance, experienced a net loss of 176,893 residents for the year ending July 1, 2023, which dropped to 120,917 for the following year. California followed a similar pattern, with net losses decreasing from 344,029 to 239,575 during the same periods.

Top States for Net Influx of Residents

Here’s a breakdown of the states with the highest net influx of residents from other states between July 1, 2023, and July 1, 2024:

• Texas
• North Carolina
• South Carolina
• Florida
• Georgia
• Nevada
• Idaho

Notably, all except Nevada and Idaho saw fewer incoming residents than the previous year. The slowdown in migration to Texas, Florida, and Georgia was particularly pronounced, with influxes halved or more compared to the previous year.

Florida’s Real Estate Market Cools Down

Florida, a real estate hotspot in 2021 and 2022, has experienced the most significant cooldown in the past two years. Its influx dropped from 314,467 to 85,267 residents, highlighting a significant shift in the market.

The Broader Trend: Decelerating Migration

The slowdown in migration across states is largely attributed to a cooling housing market, driven by persistently high homeownership costs. Elevated 30-year mortgage rates, which remained above 6% for the 12-month period ending July 1, 2024, have discouraged both buyers and sellers.

The “Lock-in Effect” and Its Consequences

This has reinforced a “lock-in effect,” where homeowners with lower rates are reluctant to list their properties, resulting in reduced inventory. Consequently, renters are also moving less frequently. Fewer people moving has been a decades-long trend, driven by an aging population, delayed milestones like marriage, and home prices that have grown twice as much as incomes since 1985.