MReport May 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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56 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Housing Costs Spark Record Share of Buyers Looking to Relocate Skyrocketing prices and rising mortgage rates have made relocating to a more affordable area the only viable option for more than 30% of prospective buyers in Q1. A ccording to a new report from Redfin, a record 32.3% of its users nationwide looked to move to a different metro area in Q1—up from 31.5% a year earlier, and up significantly from 26% in 2019. The share of homebuyers looking to relocate to other parts of the country picked up in mid- 2020 as the pandemic took hold, and it has remained elevated since then. The combination of last year's record-low mortgage rates and remote work encour- aged many Americans to relocate. Continually increasing home prices, along with quickly ris- ing mortgage rates, are adding fuel to the fire in 2022. As more homebuyers move away from pricey coastal areas, including San Francisco, Los Angeles, Seattle, and Boston, experts are seeing early signs of a housing-market slowdown in those metros. Meanwhile, skyrocketing home prices and rising mortgage rates have made relocating to a more affordable area the only viable option for some prospective homebuyers. Data finds that homebuyers are leaving Seattle at a much faster rate than before the pandemic, as the number of consumers leaving the area has picked up signifi- cantly over the last two years—an example of how the pandemic is changing where buyers are choos- ing to live. The typical home in Seattle sold for $750,000 in February, up 15% year over year, making it the eighth-most expensive major metro in the nation. Soaring home prices, combined with a high concentration of tech and re- mote jobs, have encouraged many Seattleites to seek more affordable areas with warmer weather. Would-be homebuyers leaving Seattle is a primary reason why its housing market is show- ing early signs of cooling, with a slowdown in the number of buyers contacting Redfin agents in 2022 compared to last year and a year-over-year decline in mortgage applications. Seattle had a net outflow of nearly 24,000 residents in the first quarter, up from about 10,000 a year earlier and about 4,000 two years earlier, before the pandemic began. Net outflow is a measure of how many more users looked to leave an area than move in. Although Phoenix is the num- ber-one destination for Redfin. com users leaving Seattle, home prices are up significantly from a year ago, however the $456,000 median remains far lower than Seattle's. Seattle had the fifth- biggest outflow of any major U.S. metro in the first quarter, behind four other expensive coastal job centers: the Bay Area, Los Angeles, New York, and Washington, D.C. "I've worked with many home sellers recently who are moving to a completely new area," Seattle Redfin agent Nicole McCormick said. "A lot of them are remote workers—or people who feel con- fident they'll be able to get a new job—leaving for sunnier places where they can get more home for their money, like Phoenix or Sacramento. There's also a pattern of selling and moving to the San Juan Islands, located a few hours away from Seattle. Those people are trading the city for a more rural, outdoorsy lifestyle—but homes are just as expensive." Nearly six times more home- buyers looked to move to Miami in the first quarter than before the pandemic as reports show the tropical metro was the most popular migration destination in Q1, unchanged from the second half of 2021. Phoenix, Tampa, Sacramento, and Las Vegas round out the top five most popular migration desti- nations. Sunny, relatively afford- able areas are typically the most popular places for people to move to, a trend that has picked up with the pandemic. Net inflow into all five of the most popular destinations has increased signifi- cantly since before the pandemic.

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