Reports from realtor groups, supported by statistics from van lines and moving companies, talk convincingly of people ‘flocking’ from large metropolitan areas – especially towards the West, the mountain states, the South-East, and Texas. The perception is that there has been a noticeable increase in domestic migration in the past two years, presumably related to the effects of the COVID-19 pandemic. But has there?
Taking a closer look, the actual data (from censuses, for example,) do not appear to support this. If anything, domestic migration during the last two years has been at its lowest point for decades. Yes, there are definite trends showing an exodus from larger cities, and increased population growth in smaller cities, and certain states; but it remains questionable as to how much of this is pandemic related, or even if there has been a real increase in relocation at all. According to Brookings.edu, only 8.4 percent of Americans moved residence between March 2020 and March 2021 – the smallest percentage since 1947.
“While the decline in national population movement during the pandemic year is noteworthy, it is also a continuation of a decades-long migration decline, as well as a general demographic stagnation across the nation as revealed in the 2020 census.” – Brookings, William H. Frey – November 30, 2021.
Despite mentions of ‘stagnation’, there is undeniable evidence of rapid population growth in certain states and cities, a pattern that has been clear for at least a decade now. The effects of the pandemic may have added to this existing trend. A shifting workplace dynamic, allowing for greater opportunities for telecommuting, has combined with an existing housing shortage to increase demand, especially for homes with office space. At the same time, historically low mortgage rates are encouraging millennials to take a step on to the property ladder, while greater flexibility of location allows them to move to more affordable areas. It is a reasonable assumption that those areas experiencing increased population growth will also experience an urgent need for new homes to be built, along with other infrastructure.
There are clear “winners”, cities and states that have experienced increases in population growth, and “losers”, cities and states that have seen a larger-than-average decrease in population.
Areas experiencing increased population growth over the past two years (2020 and 2021):
Ongoing trends show increased movement to Western and mountain states, the South-East and Texas. Idaho appears to be the overall winner, along with Texas, Florida, the Carolinas, Utah, Arizona, Montana, and Georgia. A recent report from Stacker lists the following cities as being in the top ten for increased population growth between 2010 and 2019, all ten having experienced population growth between 18 and 30 percent over the pre-pandemic decade:
- Austin, Texas
- Fort Myers, Florida
- Raleigh, North Carolina
- Orlando, Florida
- Boise, Idaho
- Charleston, South Carolina
- Dallas, Texas
- Houston, Texas
- Sarasota, Florida
- San Antonio, Texas
In general, the best-performing areas in terms of population growth have been smaller cities, or even neighborhoods within these cities, and rural areas – both offer greater affordability combined with the opportunity to become part of a community, plus an attractive climate and outdoor lifestyle.
Areas experiencing a decrease in population growth over the same period:
Major metropolitan areas experienced the largest decline in population during 2020 and 2021, particularly New York. However, larger cities have seen declining population rates since 2012 with much of this decline being attributed to falling immigration rates, rather than an increase in domestic relocation. States that have seen their population decline include New York, Illinois, Connecticut, and California.
What are the main reasons for this migration trend?
We must consider the most common reasons for relocation, and the respective demographic that is driving this move:
- Baby boomers downsizing, or wishing to retire to areas with more agreeable climates and affordable housing (Florida and North Carolina have experienced the highest increase in demand from this demographic)
- Young families looking for a healthier lifestyle, and more space than is affordable in larger urban centers
- People moving to be closer to family, possibly because of the pandemic (according to a report from United Van Lines, around 25 percent of people using their services did cite this as a reason for moving during 2020 – a significant increase on previous years)
- Millennials anxious to get on the property ladder and seeking affordable locations
Affordability continues to be a major factor; in this case, millennials who find themselves no longer tied to a downtown office may well choose to move to a more affordable part of the country and are more likely to be looking to purchase new homes. Interestingly, while the statistics quoted by realtors and moving companies do seem to be at odds with the actual data, what both census data and realtor reports do agree on is the locations that are “winners” or “losers”, and where the new-home demand is growing.
Despite some moves made during the past two years being temporary, as a direct result of COVID-19, there is strong evidence that the relocation trends we are currently seeing may be part of a permanent trend away from large urban centers, rather than being a pandemic-related anomaly. Predictions by realtors for the next eight to 10 years suggest a continuance of the current trend towards relocation to Southern, Western, and mountain states. First-time home buyers – often in their 20s – are helping to maintain a strong market in new homes in these areas, most likely due to affordability, and the growing ability to telecommute.