Migration Hotspots Have the Highest Inflation Rates, Redfin Reports
July 19 2022 - 8:00AM
Business Wire
Phoenix, Atlanta, Tampa and Miami have the
highest inflation rates in the country, with housing prices making
up a big portion of those rising costs
(NASDAQ: RDFN) — Four U.S. metros experienced double-digit
inflation in the second quarter–Phoenix, Atlanta, Tampa, FL and
Miami–and all four were among the most popular migration
destinations for Redfin.com users, according to a new report from
Redfin (redfin.com), the technology-powered real estate brokerage.
These destinations have the highest inflation rates in the U.S.
partly because they’re attracting so many new residents and
experiencing sharp home-price increases.
Phoenix saw prices of goods and services rise 11.3% year over
year on average in the second quarter, the highest inflation rate
of the metros in Redfin’s analysis. Phoenix was also the third-most
popular destination for Redfin.com users looking to move from one
metro to another, according to Redfin’s migration data.
Atlanta, the 12th-most popular destination, had the second
highest inflation rate at 10.9%, and Tampa (10.6%) clocked in at
number three for inflation and number two for migration. Miami, the
most popular destination, had the fourth-highest inflation rate
(10%).
Prices of goods and services are rising much slower in the
metros homebuyers are leaving
The places homebuyers are leaving tend to have lower inflation
rates. In San Francisco, which tops the list of metros Redfin.com
users looked to leave in the second quarter, prices rose 5.6%.
That’s the lowest inflation rate of the metros in Redfin’s analysis
and half that of Phoenix.
New York had the second-lowest inflation rate (5.9%), and it’s
number three on the list of places homebuyers are leaving. Los
Angeles (8%), Washington, D.C. (7.1%) and Seattle (8.9%), which
round out the top five metros homebuyers are leaving, all have
inflation rates near the middle of the pack.
“A place’s popularity has a big impact on how much its local
prices go up,” said Redfin Deputy Chief Economist Taylor Marr. “An
influx of people moving into a place like Phoenix or Tampa pushes
up demand for everything from housing to food to fuel, which pushes
up prices in all those areas and ultimately contributes to overall
inflation. That means it’s getting more difficult for locals to
afford daily expenses, especially when you consider that wages
aren’t rising as quickly. In Phoenix, for instance, wages are up
about 6% from a year ago, but inflation is up more than 11% and
asking rents are up 24%. Homeowners are in a better position than
renters because they benefit from rising home values.”
Housing costs are a bigger inflation driver in popular
migration destinations
The increase in housing costs is a bigger contributor to
inflation in migration hotspots than the places homebuyers are
leaving.
In Phoenix, for instance, overall housing costs rose nearly 16%
year over year in June, the second-biggest inflation driver behind
transportation. And in Atlanta, housing costs rose 11%, also the
second-biggest inflation driver after transportation.
Transportation includes fuel, which is a particularly noticeable
inflation driver in car-dependent places like Phoenix and
Atlanta.
On the other end of the spectrum, housing costs increased 3.8%
in San Francisco, a small inflation driver compared with food,
medical care and other goods and services, in addition to
transportation. The story is similar in New York, where housing
costs rose 4.2%, also a smaller increase than most of the other
categories.
The share of homebuyers relocating is at a record high, largely
thanks to remote work making moving more feasible. Many homebuyers
have moved from expensive coastal job centers to comparatively
affordable Sun Belt metros, though their popularity has rendered
several of those areas less affordable than before. Phoenix home
prices have risen more than 60% throughout the pandemic, reaching
$486,000 in May.
Because home prices and other costs are rising faster in popular
migration destinations, the financial benefit of living in a place
like Phoenix instead of coastal California may eventually
diminish.
To view the full report, including charts and methodology,
please visit:
https://www.redfin.com/news/migration-inflation-q2-2022
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
instant home-buying (iBuying), rentals, lending, title insurance,
and renovations services. We sell homes for more money and charge
half the fee. We also run the country's #1 real-estate brokerage
site. Our home-buying customers see homes first with on-demand
tours, and our lending and title services help them close quickly.
Customers selling a home can take an instant cash offer from Redfin
or have our renovations crew fix up their home to sell for top
dollar. Our rentals business empowers millions nationwide to find
apartments and houses for rent. Since launching in 2006, we've
saved customers more than $1 billion in commissions. We serve more
than 100 markets across the U.S. and Canada and employ over 6,000
people.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20220719005512/en/
Redfin Journalist Services: Ally Braun, 206-588-6863
press@redfin.com
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