In November, the share of U.S. homebuyers seeking to relocate to a different metro area dropped for the third consecutive month, reaching 23.9%, the lowest in 18 months, according to a report from Redfin. This is down from 24.1% a year ago, marking the first annual decline in Redfin's records, and a decrease from the record high of 26% over the summer.
The decline is attributed to a slowdown in overall homebuying in 2023, driven by record-low affordability and a severe supply shortage. Redfin.com reported a 4% decrease in users looking to move to a new metro compared to the previous year, while those searching within their home metro experienced a 3% year-over-year drop. The larger decline for those looking to relocate explains the reduced share of migrants in overall home searches.
Several factors contribute to the decrease in relocation interest. First, the return to office work has limited remote work flexibility, slowing the trend of homebuyers moving from one metro area to another. Second, the disparity in home price increases between popular migration destinations and expensive coastal metros during the pandemic has made moving less compelling. For instance, Sacramento, the most popular destination, witnessed a 35% price increase compared to an 8% rise in the Bay Area.
Despite the decline, migration rates remain higher than pre-pandemic levels of around 19%, as some Americans continue to pursue affordability. The top 10 migration destinations all boast lower home prices than the most common origin of buyers moving.
In a notable shift, Spokane, WA, secured its place on Redfin's list of popular migration destinations for the first time, ranking tenth. The city's popularity is determined by net inflow, measuring the number of Redfin.com users looking to move in versus leave. Seattle, Los Angeles, and Portland, OR, are the top three origin cities for homebuyers relocating to Spokane.
Conversely, Los Angeles has become the top metro area experiencing more outflows than inflows, marking the first time on record it has surpassed the Bay Area. The trend signifies a shift in migration patterns, with more homebuyers leaving Los Angeles than any other metro. The Bay Area follows in second place, with New York in third, based on net outflow, indicating more Redfin.com users looking to leave than move in. Despite a slowdown in migration from both Los Angeles and the Bay Area since the pandemic peak, Los Angeles has seen a resurgence in outflows in recent months, overtaking the Bay Area in popularity.