Freddie Mac’s Top Migration Winners and Losers
Phoenix falls out of the top 10 destinations for Freddie Mac homebuyers
The COVID-19 pandemic unleashed a wave of transformation across the world, reshaping not only how we work and socialize but also where we call home. As the pandemic unfolded, migration patterns in the United States began to shift: the allure of bustling metropolises gave way to the appeal of spacious suburbs and emerging midsize cities. Remote work became more normalized, enabling individuals and families to reconsider their housing options.
The post-pandemic era brought forth a new set of challenges and opportunities for homebuyers and the real estate market. As the nation grappled with the pandemic's effects, a surge in demand for homes met with historically low interest rates, driving housing markets to new heights. However, the rapid appreciation in home prices and an uptick in interest rates have injected a new dynamic into the housing landscape. According to a Freddie Mac article published May 2023, while the rate of outmigration of homebuyers leaving their current metro area has decreased by 18% in the last 12 months, homebuyers continue to move out of high-cost inelastic markets in coastal areas and to smaller, more affordable destinations inland and the south.
In the post-pandemic period from March 2020 to March 2022, the number of migrating homebuyers on a rolling 12-month period more than tripled. Despite the pace of homebuying falling in the subsequent 12 months, net migration remains higher in 2023 than compared to the same 12-month period ending in March 2021.
Although the pace of homebuying has risen substantially since 2021, the nation’s top 10 metro areas with the largest positive net migration have experienced a 20% reduction in net migration gains over the last 12 months. One metro, Lakeland-Winter Haven, Florida, managed to subvert this trend by achieving an additional 6% growth in net migration, climbing seven places to secure the third position. While the Phoenix-Mesa-Chandler, Arizona metro ranked fourth in the 2020-2022 period, it has since fallen out of the top 10. Exhibit 1 shows the top 10 largest net migration gains in the 12 months ending March 2023.
Exhibit 1: Top 10 Metro Areas with the Largest Net Migration Gains, 12-Month Net Migration Ending March 2023, Freddie Mac Loan Product Advisor Data
In Exhibit 2, we examine the top 10 metro areas with the most significant negative net migration over the past 12 months. Notably, these areas collectively experienced a 17% reduction in net migration losses compared to the previous 12-month period. However, Miami-Fort Lauderdale-Pompano Beach, Florida, stood as a singular exception, with net migration losses increasing by 52%, propelling it three places higher to eighth in rank.
Exhibit 2: Top 10 Metro Areas with the Largest Net Migration Losses, 12-Month Net Migration Ending March 2023, Freddie Mac Loan Product Advisor Data
Freddie Mac, or the Federal Home Loan Mortgage Corporation, plays a pivotal role in the U.S. housing finance system. Established with the mission to promote homeownership and stability in the housing market, Freddie Mac operates as a key player in the mortgage industry. It facilitates access to affordable home financing for countless Americans, primarily through its Loan Product Advisor (LPA), which streamlines the loan application process and generates a wealth of data. The information in Exhibits 1 and 2 was generated using accepted purchase loan applications submitted to Freddie Mac’s LPA system between April 2019 and March 2023. Notably, these data only capture the intent to move and only capture data on loan applications sent to Freddie Mac, excluding government-backed loans, non-conforming loans, and conventional conforming loan applications not submitted to Freddie Mac.