Rising housing costs drive migration from Pacific cities
The once unwavering attraction Americans had towards the West seems to be waning as steep housing costs in Western cities push people towards the South, a Bank of America Institute analysis showed.
For years, the West saw a steady increase in its share of the US population, peaking at 23.8% in 2019. However, this trend has recently reversed, with the population share dipping to 23.6% last year.
In contrast, the South has witnessed a continuous rise in its population share, now standing at 38.9%, despite a brief decline in 2020. Meanwhile, the Northeast and Midwest have seen their population shares decrease over the decades.
Citing data from the Census Bureau, the report points to unaffordable housing as a significant factor driving this migration away from the West. It noted a direct correlation between the median mortgage payment of a metropolitan area and its population change last year. Specifically, Pacific Coast metros have higher mortgage payments than other regions, contributing to their population losses.
The analysis suggests this demographic shift is predominantly a “Pacific story,” with coastal cities experiencing declines.
However, inland Western cities like Phoenix and Las Vegas, have seen growth since 2020. San Francisco emerged as the most impacted, losing just over 1% of its population in the year leading up to the fourth quarter of 2023, while Los Angeles saw a 0.7% decline, according to internal data from Bank of America.
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Meanwhile, cities in Texas and Florida experienced population increases, with Columbus, Ohio, unexpectedly leading the charge with a 1.1% population gain. The report speculates that the major cities in the West could potentially recover their allure, particularly for single-person households, which represent a large portion of the inter-metro migration in the US and have more flexibility to relocate.
For now, however, the South is benefiting from the West’s loss. The data indicates that a significant proportion of those relocating from the West to the South have substantial incomes, with more than 40% earning above $125,000 and about 10% exceeding $250,000. This demographic shift underscores the impact of housing affordability on migration trends within the United States.
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