U.S. Migration and Housing Affordability Analysis

Each year, tens of millions of U.S. residents pack up and move — many to new cities and states. While far more stay put, the flow of people, between big cities, in particular, holds insights into population growth and housing affordability.

NerdWallet examined this issue with an in-depth look at migration patterns among the largest metro areas in the U.S. We tracked where people are coming from and moving to, and how much they’re paying to live in their new homes.

“There are a lot of factors to consider when trying to understand why people move to a new city, and why some from abroad look to make the United States their new home,” says NerdWallet home expert Holden Lewis.

“While some of those reasons might seem obvious, like lower cost of living or relocation for a new job, some factors may be less tied to finances, like wanting to live closer to family or in a more culturally diverse city.”

For this analysis, we looked at the nation’s 25 most populous metro areas. Using data from the U.S. Census Bureau, we analyzed annual migration patterns from 2012 through 2016 and housing affordability data for renters and homeowners from 2017, the most recent year available. We also gathered national data on why people are moving from the 2017 American Housing Survey and commissioned The Harris Poll to conduct an online survey in January 2019.

Key findings

• America on the move. On average, 47 million U.S. residents moved each year from 2012 through 2016. The New York City metro area — the most populous in the country — had the most newcomers (413,000) and the most people moving away (433,900).

• Net losses in Chicago, New York City. All but two of the 25 metros analyzed had a net resident increase from migration. The Chicago (4,500) and New York City (20,900) metro areas lost more people to migration than they gained.

• New residents from abroad. On average, 22% of the largest metro areas’ newcomers moved from abroad each year. New York City (40%) and Miami (37%) metro areas had the largest share of newcomers from outside the U.S.

• Homeowning newcomers. The Tampa, Florida, and Phoenix metro areas had the highest share of out-of-state newcomers who were homeowners (41%), compared with an average of 32% among all metros analyzed.

• Renting vs. owning. Fewer than half (41%) of Americans say renting is more affordable than homeownership in their current area, according to the NerdWallet/Harris Poll survey. Our analysis shows homeowners spend a far smaller portion of their income on housing in the 25 biggest metros, and that’s largely due to higher incomes — the median homeowner income is more than twice the median renter income in these metros.

• Rental costs. In most of the metros examined, renters spent 30-33% of household income on housing costs. But in Miami — a metro that gets more than the average share of newcomers from abroad — that share jumped to 40% of renter income, the highest among all metros analyzed.

• Homeownership costs. In most of the metros analyzed, homeowners with a mortgage spent 18-22% of household income on housing costs. Homeowners in Los Angeles, however — the top out-of-state metro destination for movers from Houston and Phoenix — typically spent 27% of household income on housing costs, more than any other metro.

» MORE: Compare the cost-of-living in two cities

Moving among metros

The most common reason people move: wanting to upgrade. More than one-third (35%) of people who had recently moved said they wanted a larger or better quality home, according to the 2017 American Housing Survey by the Census Bureau. Such upgrades don’t typically require big moves — heading down the street or into another neighborhood is often enough. But some may seek more dramatic changes and move to another state. On average, just 3% of the population moved out of the largest 25 metros each year from 2012-2016, according to Census migration data.

“It may not seem like a considerable amount, but in large cities, a small percentage of the population can equate to big numbers,” Lewis says.

In Charlotte, North Carolina, for example, 71,400 people moved out of the metro area each year of our analysis, on average. In the Chicago area, it was 238,900. In each metro, these movers represented 3% of the population.

Moving for affordability

Even though upgrading is the most common reason people move, according to the American Housing Survey, 18% of recent movers say they left their prior residence to reduce housing costs. This mix of people looking to upgrade and save money is reflected in how housing costs change after a move. Nearly half (49%) of recent movers say their housing costs increased with their most recent move, and over a quarter (27%) say their housing costs decreased, regardless of intent.

NerdWallet’s analysis of the 25 largest metro areas found a similarly mixed bag — some moved to areas where they would pay more, on average, for housing, while others had the potential to save money with their move. For example, about 7,800 people moved from the Portland, Oregon, metro area to the Seattle area each year, on average. But Seattle homeowners typically pay $320 more each month in housing costs, and renters there pay $210 more each month than renters in Portland. Nearly as many (6,050) moved from Seattle to Portland during the analysis period, potentially paying less for housing after their move.

“Often the cities that attract the most newcomers are the same places where people are forced to compete for living space,” Lewis says. “In these growing metros, if construction of affordable housing doesn’t keep pace with population growth, then rents and home prices will rise.”

To rent or to own?

When it comes to renting or buying a home, affordability often comes down to income. While 58% of renters say it’s more affordable to rent than own in the area they currently live, only 34% of homeowners agree, according to the NerdWallet/Harris Poll survey. This difference in perspective may boil down to how much individuals have to spend.

Homeowners with a mortgage spent 18-22% of their household income on ownership costs in most of the metros examined while renters spent 30-33%. In all of the metros analyzed, the median homeowner income was more than twice the median renter income. That said, homeowners with below average incomes could find themselves strapped — in 15 of the metros we examined, the median monthly homeownership costs were at least $500 more than what renters paid.

“The more populated a city is, the more expensive homes will be, which generally reserves home ownership to those with high incomes," Lewis says. "Lower incomes among renters combined with high housing costs means it’s an uphill battle for those who are looking to save for a home in America's most populated cities.”

» MORE: Compare mortgage rates across top lenders

Homeownership has a higher barrier to entry than renting, and most out-of-state newcomers who moved into the large metro areas were renters — 68%, on average. The Phoenix and Tampa metro areas had the highest homeownership rates among new residents (41%), while the San Diego area had the lowest (23%). This could be due, in part, to the limited availability of housing: 40% of Americans say it’s easier to find rental homes than homes for sale in the area where they currently live, according to the NerdWallet/Harris Poll survey, and finding a home to purchase in another state can be a difficult task.

Table: Metro migration data