An increasing number of home shoppers are looking for homes in areas other than where they live. According to an analysis by Realtor.com, home shoppers in Western and Northeastern metros are most likely to search for out-of-market homes.
Affordability, an opportunity for homeownership, and warmer temperatures are the primary drivers of relocation patterns, according to the report.
Over two-thirds of out-of-metro traffic from the top 100 metros went toward metropolitan areas with higher homeownership rates in the first quarter, according to the report, and more than half of shopping activity for prospective buyers in the West and Northeast was into more affordable markets.
Realtor.com says the trend of searching for homes in areas with higher homeownership rates could indicate prospective buyers are exploring markets with lower barriers to entry as a means to gain access to homeownership.
While the Northeast and West, regions with lower homeownership rates, had higher shares of out-of-metro activity, the South and Midwest, where homeownership rates are higher on average, had low shares of out-of-metro shopping. As a result, prospective buyers in the Southern and Midwestern metros may face more challenging conditions, with fewer options of easily accessible markets to choose from, according to Realtor.com.
Approximately 50.3% of out-of-metro traffic from the top 100 metros in the first quarter went toward areas with higher affordability scores, an increase on a year-over-year basis. Additionally, nearly 60% of out-of-metro views went to markets with warmer climates in the first quarter, an increase of 3 percentage points compared with the same period in 2022.
On a national basis, approximately 60% of activity from the top 100 metros went to homes located outside the metropolitan area of origin, an increase on both a sequential and year-over-year basis, according to Realtor.com. While the West has consistently had the largest share of shoppers looking for homes in other metros, the Northeast region experienced an increase of 4.6 percentage points in out-of-market shopping in the first quarter.