Record-breaking inflation continues to dominate headlines as 2022 draws to a close. As cost-of-living factors compound, it’s no surprise that money is on the mind of many Americans. But is this financial squeeze enough to prompt people to move to more affordable cities?
That’s certainly the million-dollar question as today’s workers have more flexibility than ever to relocate thanks to workplace trends like work-from-home policies and the “Great Resignation.”
At Livability, we identify what makes communities great places to live and tell the stories of their compelling assets. We commissioned an in-depth survey to examine what affects relocation decisions, with a special focus on affordability.
The survey, conducted in spring 2022 by leading global market research firm Ipsos, asked 1,005 diverse American adults about the characteristics of livability they would value in a prospective home community, with an emphasis on how rising costs affect their relocation decisions.
The survey evaluated a variety of factors providing insight into questions such as:
If you were considering moving to a new area, what factors would you consider most important?
Has the current rate of inflation in the U.S. made you more or less likely to consider relocating?
What is the minimum amount of savings on housing costs that you would require before you considered moving to a more affordable city?
We crunched the numbers and analyzed the data to find key insights that reveal how affordability influences relocation. Some of these insights included:
Cost of living is key
Some 69% of respondents considered cost of living or financial impact to be a top three factor in their moving decisions, 32% cited it as the most influential factor, and 23% consider it the second most important factor.
People want more living space
During COVID, people hunkered down at home and, for many, that changed their relationship with their living spaces. These days, potential residents are prioritizing extra square footage and outdoor living spaces. In addition to prioritizing affordability, a large number of people who are relocating want their budgets to net them some extra space.
Inflation is a motivating factor
Could the decline in purchasing power spur people to seek out more affordable cities? The answer, we found, is a bit of a mixed bag depending on what stage of life people are in and where they’re currently located.
People with children, as well as people who are employed, for instance, are more likely to relocate in the next six months due to inflation. However, the current rate of inflation is less likely to make an impact on relocation decisions for women and for individuals who are 55 and older.
Residents in the Northeast or Midwest are more likely to consider relocating in the next six months due to the current rate of inflation than those based in the South.
Housing affordability carries weight
Affordability can be subjective: those with household income under $50,000 consider $600 to $900 in monthly living expenses (i.e. rent or mortgage) to be affordable and those earning up to $100,000 consider $2,500 a month in living expenses as affordable.
In general, a 20%-29% decrease in housing costs seems to be the sweet spot for inspiring people to consider moving to another community. 28% of our respondents said if moving to a new city meant they’d see a cost decrease in that range, they might consider it. Still, about three in 10 people say a decrease in housing costs wouldn’t necessarily affect their decisions to move. Women and those older than 35 are less likely to be influenced by lower housing costs.
Climate and proximity to family are important
In addition to cost concerns and affordability, weather and family and friends are top of mind for people when deciding where to live. About six in 10 survey respondents indicated that climate is a factor they’d consider when it comes to moving, and 14% list it as the most important criteria.
Distance from family was the most important factor influencing a move for 17% of respondents, with it being a bigger priority for those with children and people over 55. Nearly half of respondents said proximity to family is something they would consider as part of a moving decision.
Bottom line: flexible work arrangements, rising costs and current events continue to shift our lives and our priorities at a fast pace. It’ll be fascinating to see what shifts 2023 brings.
Read the original article on Livability.