During the 10-year period between the 2010 and the 2020 national censuses, national population growth was among the lowest levels in history. One of the key components of this decline in population growth was millennials, who were in their 20s and 30s between 2010 and 2020 having fewer children than previous generations. With the decline in population, this left domestic net migration as the key component to population change at the state and the metro levels.
Cities in the Sun Belt, along with tech hubs cities like Denver and Seattle saw the strongest net migration numbers between 2010 and 2020. Among the U.S. metros with a population over 200,000 people, 15 markets averaged over 20,000 new residents annually as a result of domestic net migration, all of which were located south of Washington, D.C., and/or west of the Mississippi River, according to the U.S. Census Bureau.
While net migration had been slowing for several decades, the onset of the pandemic in early 2020 reversed that trend to an extent. The picture painted of mass migration to suburbs, rural areas and small-town vacation homes, appeared to be a bit exaggerated.
According to moving data from the U.S. Postal Service (USPS) there were nearly 32 million permanent moves in 2020, up only 1% from 2019. The majority of moves occurred in March and December of 2020, with both months recording over 300,000 permanent changes of address. In 2021, net migration ticked up to roughly 36 million with cities New York, Los Angeles, Chicago and San Francisco all seeing outward net migration of over 100,000 residents.
So where did everyone go?
Sun Belt metros continued to be among the largest gainers of new residents as well as nearby secondary markets of some of the nation’s primary markets. According to Berkadia’s SVP of Client Services, Dori Nolan, “We have seen a substantial uptick in housing demand by renters in the Sun Belt metro. Moreover, apartment investors have also favored the Sun Belt markets. They have been able to enjoy strong fundamentals, and, as a result, generating strong risk-adjusted returns in the past few years.”
According to the Census Bureau, roughly 24.7% of the nation’s 36 million movers in 2021 moved to a different state. Those living in cities with a large share of remote-friendly occupations relocated to places like Southern California’s Inland Empire, the Texas Triangle, Florida’s Gulf Coast and the Southwestern Sun Corridor, which is comprised of Phoenix, Las Vegas and Tucson. In addition to being rated among the top markets in the nation for quality of life, these markets all boasted some of the most affordable costs of living in the nation prior to the pandemic and have seen a large number of major corporate relocations and/or expansions over the last five years.
Lasting Impact of Net Migration
Early indicators are showing that the outward migration patterns of the previous two years have slowed or in the case of some cities began to reverse. Migration economics have caused rent and home prices in some of the more affordable metros before the pandemic such as Tampa and Phoenix to skyrocket. As secondary markets lose that affordability appeal and the economy has fully reopened, residents of cities like San Francisco, Seattle, Miami and Denver (which recorded outward net migration in 2020 & 2021) are projected to return to recording positive net migration in 2022. “Miami, Florida has been a hotbed for companies relocating from higher tax states like Chicago and New York looking for a more friendly business climate. For example, Citadel announced earlier this year that they will be relocating its global headquarters from Chicago to Miami. Corporate relocations to Miami alone should lead to higher positive net migration,” said Nolan.
For an in depth look at net migration trends on the regional and metro level visit our interactive dashboard here : Berkadia Net Migration Dashboard
Sources: U.S. Census Bureau, Moody’s Analytics, USPS, Bloomberg, Joint Center for Housing Studies of Harvard University