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Inflation has hit especially hard in America’s hottest migration destinations, amounting to double-digit losses in purchasing power for residents of some of the nation’s most popular places to move.
Consumer price growth exceeded 10 percent year over year in the second quarter in Phoenix, Atlanta, Miami and Tampa — each of which had among the nation’s strongest net inflow of interest in moving, as tracked by Redfin in its latest report.
“A place’s popularity has a big impact on how much its local prices go up,” Redfin Deputy Chief Economist Taylor Marr said in the report. “An influx of people moving into a place like Phoenix or Tampa pushes up demand for everything from housing to food to fuel, which pushes up prices in all those areas and ultimately contributes to overall inflation.”
Prices rose more quickly over the last year in Phoenix than anywhere else in the country at an annual inflation rate of 11.3 percent. The Arizona metro was Redfin’s third-most-popular migration hotspot in the second quarter.
Miami. the most popular metro to move to, saw 10 percent inflation over the last year. And the place with the second-highest net migration inflow, Tampa, saw prices rise by 10.6 percent.
Atlanta’s 10.9 percent annual inflation was especially high for its 12th-highest net migration rate.
The relationship between lots of inbound movers and high inflation wasn’t just apparent in these extreme cases, according to Redfin’s study. In many of the places where outflowing migration was high, prices of consumer goods were more stable.
The prices of goods and services rose merely 5.6 percent in San Francisco, the place where Redfin.com users were most likely to contemplate leaving in the second quarter of the year. That’s well below the national average for consumer price growth.
Annual inflation was also relatively low in New York City at 5.9 percent and in Washington, D.C. at 7.1 percent. Both of these were among the places from which Redfin users showed the most interest in moving.
One of the biggest reasons for this relationship appears to be inflation in the cost of housing itself, Redfin’s report argues.
Housing costs rose almost 16 percent year over year in Phoenix, according to the government’s latest consumer price index figures. This was the second-biggest driver of inflation in that area next to transportation.
The cost of housing was also the second-biggest contributor to inflation in Atlanta, where housing costs were up 11 percent year over year.
Meanwhile, in the places where inflation was lowest, the cost to the typical resident of renting or owning a home increased by a fairly normal amount: 4.2 percent in New York and 3.8 percent in San Francisco.