American migration patterns have been changing over the last few years. In 2021, Americans were moving south and west. They were moving not only for employment reasons but also to be closer to family. The pandemic led people to prioritize family and life style choices, supported by flexible work requirements. People not only moved from high density metros to smaller metros, but also to locales with cheaper housing and lower taxes.

In 2021, Idaho’s population increased by 3.4% and Utah’s by 2%. The top ten inbound states added one percent or more of their populations in 2020. All top inbound states offered relatively cheaper housing in conjunction with lower taxes. Contributing to the buying frenzy were record low mortgage rates in 2021 – hovering between 2.65% and 3.11%. Homes were being snapped up at a rapid pace, so that inventory levels were finding new lows, resulting in rapidly rising prices.

In 2021, Idaho saw home prices surge by 27.9%. Utah experienced a similar increase, with prices rising by 27.2%. The Sunshine State also witnessed substantial growth, with Florida recording a 25.9% increase in home prices. Texas followed closely behind, experiencing a 19.4% rise in home values.
The steep jump in mortgage rates in 2022 in combination with high prices slowed down migration considerably, diminishing the allure of many “sunbelt” destinations. Several factors are contributing to this shift. Firstly, the rapid price escalation in these states has significantly reduced affordability for many. Secondly, the return-to-office trend has dampened the appeal of remote work havens. Thirdly, rising insurance costs and property taxes in states like Florida and Texas are adding to the financial burden of homeownership. As a result, the allure of warmer climates is waning for some, with individuals prioritizing affordability and lower living costs over sunshine. This is evident in the decline of migration to these southern states. This is evident from data showing that Florida and Texas did not even feature in the top ten list of inbound migration destinations in 2024.
The slowing pace of migration to Sun Belt states like Texas and Florida has coincided with a significant deceleration in home price growth. These states, which witnessed rapid price appreciation in recent years, now exhibit modest gains, with both Texas and Florida experiencing only 1% price increases from Q3 2023 to Q4 2024. In contrast, states like Delaware (8.5% increase) and South Carolina (5.8% increase), which continue to attract in migration, are experiencing more robust price appreciation.
This correlation underscores the interplay between migration patterns and local housing markets. The increasing costs associated with moving, coupled with the challenges of finding affordable housing in many desirable destinations, are influencing Americans to remain in place, significantly impacting local housing market dynamics.