During the depths of the pandemic, rising home prices were often tempered by low interest rates, making mortgage payments more manageable. Today’s higher rates can easily add more than $100,000 to the cost of a typical loan. And although homes are now sitting on the market longer, larger mortgage payments and general inflation have squeezed many buyers out of the market.
What’s a buyer to do? Moving to a more affordable area is becoming a common tactic. By tracking searches on its platform, Redfin found that more buyers than ever are looking for homes outside of their current cities.
During the first quarter of 2020, 26 percent of potential buyers on the platform were searching in another metropolitan area. By the second quarter of 2021, out-of-town searches reached 31.5 percent. After leveling off a bit, the upward arc of long-distance searches rebounded, reaching a new high in the second quarter of 2022, when 32.5 percent of Redfin searches were from out-of-town buyers.
Of the more than 100 metropolitan areas covered in Redfin’s study, Cape Coral, Fla., had the highest percentage of buyers searching from out of town, with the greatest number of them originating in Chicago. North Port, Fla., about an hour north of Cape Coral, had the next highest share of interested buyers from out of town, also with the largest share from Chicago. The list of cities with the greatest outflow of residents was dominated by expensive locales, starting with San Francisco and followed by Los Angeles, New York and Washington, D.C. (Chicago ranked ninth.)
To complete the analysis, Redfin examined searches by about two million users in the second quarter of 2022. To focus in on serious buyers, the study was limited to users who viewed at least 10 homes in a city other than their own, and those searches must have equaled at least 80 percent of the user’s total searches. Outbound searches from each city were subtracted from inbound searches to quantify outflow. This week’s chart shows the metropolitan areas with the highest percentage of out-of-town buyers.