Migration patterns in the United States have been changing in recent years. While certain areas of the country have traditionally attracted large numbers of migrants, new trends suggest that people are now moving to different regions for different reasons. In this blog post, we’ll explore some of the factors driving these shifts in migration patterns and what they mean for the future of the United States.
First, let’s look at the data. According to the United States Census Bureau, the population of the United States grew by just 0.35% from 2019 to 2020, which is the lowest growth rate in over a century. However, within this overall trend, there have been significant shifts in population distribution. Many cities that were once growing rapidly have seen their populations stagnate or even decline, while smaller cities and suburbs have experienced significant growth.
One reason for this shift is the high cost of living in many coastal cities. Cities like San Francisco, New York, and Los Angeles have long been known for their high housing costs and high taxes, which have made it difficult for many people to afford to live there. An analysis of census data from the National Association of Realtors (NAR) reveals which states lost residents and which made population gains in 2022. The trends clearly indicate that many Americans are moving in response to affordability concerns.
Additionally, the COVID-19 pandemic has made people reconsider where they want to live, as remote work has become more common, and many people have realized that they don’t need to be physically present in a specific location to do their jobs. This has led to the rise of what is being called “secondary cities” – places like Austin, Denver, and Nashville that offer a lower cost of living, a thriving job market, and a vibrant culture. These cities are attracting younger professionals who are looking for a better quality of life and more opportunities to build their careers.
In addition, political and cultural factors are also playing a role in shifting migration patterns. The 2020 presidential election saw many people leaving cities like New York and San Francisco for more politically conservative areas of the country. This has led to an increase in population in conservative-leaning states like Texas and Florida, while more liberal states like California and New York have seen a decline in population.
Despite that current migration trend has decreased compare to the period from 1950 to 1990, the Pew Research notes that fewer people are heading into urban areas where rents have risen rapidly, reversing the trend of urbanization. Moreover, rising mortgage rates made migration less appealing for people who currently have mortgages at lower rates. Also, those moving across the states reflect the trend in forced early retirement and voluntary job-quitting, as people were taking advantage of these transitions to find better jobs or more affordable housing in other states.
The biggest beneficiaries of migration were the states with low- or no-income state taxes. Moreover, at the beginning of the trend, prior to Covid pandemic, those states also offered considerable savings in the mortgage cost or rent expenses, especially to people coming from major metropolitan areas like New York, San Francisco, Los Angeles. Per Fiscal Policy Institute, “The typical family that moves out of New York State saves 15 times more from lower housing costs than they do from lower taxes”.
According to the Realtor.com, the trajectory of nationwide rents helped in making long-distance movement possible. The median rent growth across the top 50 metros slowed to 3.4% year-over-year.
Also, the median rent was down by $70 from the peak in 2022 but is still $308 higher than the same time in 2019. In addition, the ability to rent instead of buying when the interest rates are high comes from the so called “sellers strike”, people who currently own houses but unwilling to sell them, because low mortgage rates they got on their mortgage. Those who are moving prefer to rent their house instead of selling and rent (or buying a house if affordable) a place at a new location. Other factors, such as many construction projects that were delayed due to Covid, were finally delivered to the market, and contributed to an increase in places available for rent.
Obviously, the current migratory trend will be ongoing changes in the future since a lot of factors play an important role in how Americans move around and settle down in their lives. One thing that stands out is that current real estate prices have skyrocketed over the past few years. The migration process is a part of bigger process where supply and demand will eventually create an equilibrium between the buyers and sellers and the prices will revert to the mean, making housing more affordable to many young people who dreaming of buying their own place to live.