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Given high mortgage rates and real estate prices, potential buyers are understandably looking for deals – even if it means moving to another city, state or region.
Consumers who moved interstate last year tended to choose new metropolitan areas where housing costs and competition are less intense, and construction keeps up with demand, according to a recent analysis of United Van Lines data by Zillow Group keeps pace.
Homes in these consumers' new metropolitan areas cost, on average, $7,500 less than in the places they left them.
“Housing affordability has always been important … and you see that across the country,” said Orphe Divounguy, a senior economist at Zillow. “Housing affordability is changing migration trends.”
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The search for affordability has led to a surge in migration to states such as Florida, North Carolina, South Carolina, Tennessee and Texas, said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors.
Cities in the Zillow analysis that have the most inbound moves include Charlotte, North Carolina; Providence, Rhode Island; Indianapolis, Indiana; Orlando Florida; and Raleigh, North Carolina, according to Zillow analysis.
The real estate market is facing a low supply of active listings; While builders are trying to close the gap, they can only do so in areas where it is financially feasible for both buyers and builders.
“That’s why you see these relatively cheaper markets in the South and Midwest being at the top of the list,” Divounguy said.
The appeal of these metropolises is that they are “markets where jobs are being created quickly” and where more new homes are being built, Divounguy said. For example, Charlotte and Raleigh have become technology and financial centers that attract workers from metropolitan areas such as New York City.
“For that reason, they have remained relatively cheaper than other markets across the country,” he said.