Millions of people in the U.S. moved within the past year and a half in what economists now call the “Great Reshuffling,” but how drastic was this shake-up, and did it truly change the demographic landscape of our country?
The Shake-Up
The housing market boomed spectacularly throughout the coronavirus crisis. If you weren’t handed a pink slip in April 2020, then you likely reaped the benefits of working remotely. You mean I get to work from home in my pajamas while eating chips and chugging soda all day like no one is watching? It sounds like a nice gig, until a few weeks becomes a few months; a few months becomes a year and before you know it, the office building is sold and you’re permanently remote.
A change in scenery became necessary for a lot of families and with interest rates at historic lows, it’d be cheap to purchase a home, especially in a more affordable area. According to a Mover Report by Zillow, most Americans who moved out of town during the pandemic moved to sunny, affordable areas, such as Arizona, Florida, and Texas. Many of these movers were also paying less for larger homes.
The top reason cited amongst homebuyers who moved during the pandemic was the need for more space. In August 2020, Redfin found that sales grew 10 times faster for large homes (3,000-5,000 square feet) than small homes.
"People want bigger: Bigger houses, bigger properties," said Redfin agent Chriss Houghton at the time. “If people are living in a small cookie-cutter home right now, they want a larger house with extra rooms and a dedicated place for an office.”
A national survey by PulteGroup found the vast majority of consumers preferred homes with dedicated office space, increased Wi-Fi capability, and other considerations to make their home well-suited for telework. Amongst adult men and women, 53% preferred a dedicated home office over an additional bedroom.
The price of homes appreciated over time, but that didn’t settle the homebuying frenzy. Even today, homes are selling at top speed across the U.S. during a time of year when the housing market usually slows. But, where are all these people moving to? What are the hottest markets for pandemic homebuyers? To answer these questions, LendingTree created a survey to analyze the moving patterns of pandemic homebuyers from March 1, 2020, through Sept. 21, 2021.
Migration Trends
While most movers looked to stay in their current state, a significant share looked to move elsewhere. On average, 85.38% of movers stayed in the state in which they were living. Researchers assume this trend emerged because it’s cheaper to move in-state rather than out-of-state, and people have already forged economic and social ties within their home state.
Texas residents really showed their loyalty to the lone star state by having the highest percentage of in-state moves at 93.33%. Inexpensive home prices and the lack of state income tax also made it a popular destination for out-of-state movers from places like Alaska, Colorado and California.
New York had the highest percentage of movers looking to leave with only 73.35% of residents willing to stay in the Empire State. Most of those who leave, though, are not typically moving all the way across the country. New Jersey happened to be the most popular destination for these out-of-state movers.
The same goes for most out-of-state movers — they don’t go very far. In 27 states, the most popular destination for out-of-state movers was the state bordering their own.
The number one destination for all out-of-state movers throughout the pandemic was Florida. In 18 out of 50 states, Florida was overwhelmingly the most popular choice for a new home. The Sunshine State has always been welcoming to outside residents, particularly retirees, due to affordable housing, no state income tax, and perpetually sunny weather. Florida also retains residents with the third highest share of in-state movers.
Although a mass reshuffling did occur over the course of the pandemic, it was not as drastic as some may have expected. People may want to avoid moving vast distances for a variety of reasons. Many were unsure whether the remote setup for work would be temporary or permanent, considering many companies at the time did not know either. It made sense to stay in the same area in case workers were called back to the office.
Other reasons people may have not wanted to uproot their life was the desire to save money. In case you didn’t know, movers and truck rental companies charge by the mile, and moving across the country amounts to a pretty penny.
Additionally, some people are unwilling to sever bonds with their community. Even if movers could afford to move out-of-state, they would not want to cut off social ties with their friends and family members, or switch their child’s school. Because of these ties alone, it’s not worth it on an emotional level to move to another area.
The Emerging Exurbs
These moves could reshape transportation, real estate, and create “an emerging fixture of American life: the exurb,” an article from the Wall Street Journal speculates
Previously, communities that reside on the fringe of major metropolitan areas were valued for their privacy and affordable housing, though they were much less wealthy than the dense cities and affluent suburbs. In the aftermath of the pandemic and “Great Reshuffling,” however, these exurbs could become much wealthier. The Brookings Institute reported that the population in rural and exurban areas began to swell with more white-collar workers even as the pandemic weakened. These regions allow employees to be within commuting distance of the cities they work in, considering many firms requested workers to be back in the office at least partially.
New arrivals in the exurbs are also purchasing their first or second car now that they have inflated credit scores. Living in a remote area requires your own vehicle since public transportation may be lacking, and many of these residents commute to the city for work. Though, many of these millennials can afford it after stockpiling money over the past year from moving out of pricier areas and saving their stimulus checks.
The demographic of American exurbs are shaking up with millennials purchasing bigger homes, more cars, and bringing in higher household incomes. Eventually, these new arrivals could make a big enough impact to increase real estate value, neighborhood income levels, and availability of public transportation.
