The 2023 Allied US Migration Report presents a detailed analysis of the current trends in interstate moves across the United States, highlighting significant patterns and underlying economic factors.
This year marked another decrease in the volume of interstate moves. Following the 20% decrease in 2022 compared to 2021, there was a further 12% decline in 2023 relative to the previous year. This continuous decline indicates a notable shift in migration patterns over the last two years.
A key factor in this decline is the fluctuating mortgage interest rates. After hitting historic lows during the COVID-19 pandemic in 2020 and 2021, rates surged in 2022, reaching their highest levels since 2002. This upward trend continued in 2023, with rates oscillating between 6% and 7%. These high borrowing costs have likely deterred many potential homebuyers, impacting the overall number of interstate moves.
In addition to the fluctuating mortgage interest rates, several other economic factors have significantly influenced the 2023 migration trends in the United States:
The most attractive states for relocation in 2023 were South Carolina (65%), Arizona (61%), Tennessee (61%), North Carolina (60%), and Florida (52%). These states have consistently drawn new residents, which can be attributed to their favorable economic conditions, appealing climate, and growing job markets.
In terms of cities, Charleston, SC (70%) emerged as the top inbound city, followed by Tucson, AZ (70%) Charlotte, NC (68%), Nashville, TN (57%), and Phoenix, AZ (54%). These cities offer a blend of economic opportunities, lifestyle benefits, and, in many cases, a more relaxed pace of life.
South Carolina, with Charleston as its standout city, has become a top destination due to its combination of a growing job market, affordable cost of living, and a pleasant climate. The state's appeal is bolstered by its burgeoning tech sector and manufacturing growth, providing ample employment opportunities. Charleston, in particular, offers a rich cultural scene, historical attractions, and a strong sense of community, making it highly attractive for new residents.
Arizona's draw, with Tucson leading the way, can be attributed to its booming job market, particularly in tech and manufacturing. The state's relatively lower cost of living compared to California and its warm climate are significant draws. Tucson combines urban amenities with easy access to nature and outdoor activities, appealing to a diverse demographic.
Tennessee, with Nashville as a prime example, offers a mix of economic opportunity, no state income tax, and a vibrant cultural scene. Nashville, known for its music industry, has a growing healthcare sector and is increasingly becoming a hub for tech startups.
North Carolina, with cities like Charlotte, has seen growth due to its diverse economy, which includes finance, tech, and healthcare sectors. The state also offers a blend of urban and outdoor lifestyles, appealing to young professionals and families.
Florida's appeal lies in its favorable tax policies, including no state income tax, warm climate, and diverse economic opportunities, ranging from tourism to aerospace.
On the other side of the spectrum, Illinois (64%), California (60%), Pennsylvania (57%), Michigan (57%), and Washington (55%) topped the list of outbound states. High living costs, economic challenges, and, in some cases, climate issues have contributed to this trend.
In terms of cities, San Diego (66%) led the outbound cities, along with Chicago, IL (64%), Seattle, WA (61%), Detroit, MI (60%), and Los Angeles, CA (60%). Factors such as the cost of living, job market conditions, and urban challenges like crime rates and congestion may have influenced these patterns.
The departure of major companies like Boeing, Citadel, and Caterpillar has impacted Illinois, particularly Chicago. High living costs, taxes, and concerns about crime rates and urban challenges contribute to the outbound trend.
The exodus from California, including the relocation of companies like Oracle, Tesla, and Vrbo, can be linked to its high cost of living, stringent regulatory environment, and high taxes. Despite its strong economy and innovation hubs, these factors have compelled individuals and businesses to relocate.
States like Pennsylvania and Michigan, despite their rich industrial histories, have faced challenges in transitioning their economies, leading to slower job growth and outbound migration.
Washington state, particularly Seattle, has experienced outbound migration due to high living costs and housing prices despite being a tech hub.
The report also highlighted that the most popular days for moving were Fridays, followed by Wednesdays and Tuesdays. In terms of months, June, August, and July remained the peak times for relocation, coinciding with favorable weather and summer breaks.
In conclusion, the 2023 migration trends reveal a cautious approach to relocation, influenced significantly by economic factors, especially mortgage rates. Despite these challenges, certain states and cities continue to attract residents, driven by a combination of economic opportunities, affordability, and quality of life.
Data was provided for all interstate moves that were loaded from January 1, 2016 to December 15, 2023. To maintain comparability with the time frame covered in 2023, only moves loaded by December 15 of each year were included.
Shannon Steinberg
