Americans are continuing to flee major cities like New York and San Francisco, creating a trend known as the ‘Great Migration’. This mass exodus is primarily happening in states run by Democrats, with a significant number of people moving away from predominantly blue cities. The data comes from a Bank of America analyst note that is based on aggregated and anonymous internal customer data. During the three-month period from April to June, there were notable population declines in many Northeastern and Western cities, continuing a trend that began during the pandemic.
The Northeastern cities of New York and Boston saw the largest net population outflows in their region, while cities on the West Coast such as San Francisco, Los Angeles, Seattle, and Portland, Oregon, experienced significant drops in population. These cities have traditionally been seen as hubs of culture, innovation, and opportunity, but recent trends suggest that residents are seeking greener pastures elsewhere.
One of the driving factors behind this mass exodus is the high tax burden in states like New York and California. Residents in these states face some of the highest tax rates in the country, making it increasingly difficult to afford the cost of living. San Francisco, in particular, has been plagued by a spike in property-related crime, further contributing to the desire for residents to seek safer and more affordable living arrangements.
On the flip side, states like Texas, Florida, and Nevada, which do not have a state income tax, have seen an influx of new residents. Among the top 23 major metropolitan areas in the country, Columbus, Ohio, experienced the biggest influx of people during the second quarter of 2024, followed by Austin, Texas; Las Vegas; San Antonio; and Jacksonville, Florida. These states are attracting new residents with their lower cost of living and favorable tax policies.
Despite the migration from major cities, the Bank of America report also noted that fewer households are moving between cities. This trend is likely due to the increased “hidden” costs of homeownership, such as homeowners’ insurance and property taxes, which have risen significantly in recent years, especially in Sun Belt states. Gen Z and lower-income households were more likely to relocate in the second quarter, driven by financial necessity rather than choice.
The report highlighted the challenges faced by younger Americans and lower-income households when it comes to housing affordability. Affordability and cost-of-living are cited as the top reasons behind their decision to move. The report also pointed out that it is easier for younger and lower-income households to change addresses because a greater proportion of these consumers are renters rather than homeowners. The homeownership rate is just 35% for Americans ages 25 to 30, compared to a 66% rate across all ages.
Subheadings:
The Exodus from Major Cities
The trend of Americans fleeing major cities like New York and San Francisco has been gaining momentum, with a growing number of residents seeking new opportunities and a better quality of life elsewhere. This mass exodus, known as the ‘Great Migration’, is reshaping the demographic landscape of the country and prompting a closer look at the factors driving people away from urban centers.
Factors Driving the Migration
High tax burdens, rising property-related crime, and the overall cost of living are some of the key factors driving the migration from major cities to other regions. Residents are seeking more affordable housing options, lower tax rates, and safer communities, leading them to consider relocation to states with more favorable economic conditions.
The Impact on Housing Trends
The migration from major cities is having a significant impact on housing trends, with fewer households moving between cities due to the hidden costs of homeownership. Gen Z and lower-income households are among the most affected, as they face challenges in finding affordable housing options in urban centers. The shift towards renting over homeownership is becoming more pronounced among younger and lower-income demographics, highlighting the need for policy changes to address housing affordability issues.
