1、April 2023How Rising Living CostsAre Impacting DomesticMigration TrendsOur latest white paper analyzes the impact of inflation onmovement patterns across the country and examines howchanging demographics can affect local businesses.1Table of ContentsMany Ways To Move3A Continued Shift Towards States

2、 with Lower Household Income4Exploring Migration Trends:Origins And Destinations5High Inflation Rates are not Deterring Movers6Higher Inflation,But Lower Prices8Heading Down to the Sunshine State9Floridians Are Staying Local10The Interplay of Inflation and Migration11Key Takeaways12 2023 Placer Labs

3、,Inc.|More insights at placer.ai|2Many Ways To MoveWeve looked at the impact of internal migration before,exploring the way COVID-19changed the way people move and the subsequent ripple effects on local industries.Now,as the pandemic recedes into the background,rising inflation rates havebecome a ma

4、jor concern and the rising cost of living may be leading someindividuals and families to relocate to more budget-friendly states and cities.The rising cost of living may be leadingsome individuals and families to relocate tomore budget-friendly states and cities.This white paper looks at recent loca

5、tion intelligence data to better understand thefactors driving migration trends today.To understand what drove domestic migrationin 2022,we analyzed the correlation between statewide household income and ratesof inbound migration and looked at how cost of living differences impact migration ona loca

6、l level.We found that there appears to be a small but significant movement ofpeople from regions with higher income and higher cost of living to more affordableareas.Domestic Migration in 2022For the most part,the domestic migration trends of 2021 continued in 2022.Theentrenchment of pre-existing pa

7、tterns is highlighted by the 12-month comparisonmaps below,which show some variance but no major shifts.Sunbelt states like Arizona and Florida continued to see positive net migration,whilethe negative net migration out of states like California and Illinois continued.2023 Placer Labs,Inc.|More insi

8、ghts at placer.ai|3A Continued Shift Towards States with LowerHousehold IncomeThe recent rise in the cost of living throughout the country may also be encouragingsome people to take advantage of their newfound workplace flexibility and move tomore affordable areas that are further away from office h

9、ubs.Combining 2020 Census Data with location analytics metrics indicates that,betweenJanuary 2022 and January 2023,many states with a higher median household income(HHI)experienced negative net migration.Meanwhile,states with a lower median HHItended to see positive net migration.Some of the move to

10、wards lower-income statescould be driven by people looking to purchase an affordable home amidst the rapidincrease in housing prices over the past two years.Many of the states with lower HHIalso have lower or no income taxes,which could be attracting individuals andfamilies looking to offset inflati

11、onary pressures.2023 Placer Labs,Inc.|More insights at placer.ai|4Exploring Migration Trends:Origins And DestinationsAnalyzing the origin-to-destination HHI ratio of each state for domestic migrationbetween January 2022 and January 2023 further showcases the trend of peoplemoving into states with a

12、lower median HHI than their origin state.This metriccalculates the median HHI of all origin regions,weighted to reflect the share of peoplecoming from each state,and compares the weighted median origin HHI to the medianHHI of the destination.For example,between January 2022 and January 2023,theweigh

13、ted median HHI of the states from which Americans were moving to Vermontwas$72.1K 14%higher than Vermonts median HHI of$63.5K.This means thatVermont had an origin-to-destination HHI ratio of 14%between January 2022 andJanuary 2023.2023 Placer Labs,Inc.|More insights at placer.ai|5States with a net p

14、ositive migration tend toalso have a positive origin-to-destinationHHI ratio.As the chart below shows states with a net positive migration tend to also have apositive origin-to-destination HHI ratio.In other words,most domestic migrationinvolved relocations from more affluent,higher HHI areas to mor

15、e affordable,lowerHHI states.And as the cost of living remains high,the movement from higher incomeareas to lower income areas observed in 2022 may well continue in 2023.High Inflation Rates are not Deterring MoversLocation intelligence seems to indicate that the increased cost of living across thec

16、ountry is pushing some individuals and families to relocate to more affordable 2023 Placer Labs,Inc.|More insights at placer.ai|6pastures.But does the movement of people from higher-income areas tolower-income ones end up bringing about price increases in the destination region?How does inbound migr

17、ation impact local inflation?Digging into the data for Floridaand Arizona suggests that,indeed,migration patterns may be influencing inflationrates,with states experiencing high rates of migration also seeing some of the highestlevels of inflation.Migration patterns may be influencinginflation rates

18、,with states experiencinghigh rates of migration also seeing some ofthe highest levels of inflation.Florida and Arizona have some of the highest migration rates in the country,and bothstates have experienced inflation rates above the national average.But despite thisinflationary pressure,the increas

19、ed migration to both states shows no signs ofslowing down.The Phoenix-Mesa-Scottsdale,Arizona CBSA(core-based statistical area),with amedian HHI of$67,000,emerged as a popular destination during the COVID-19pandemic,becoming the 14th fastest-growing large metro area in the country in2021.The influx

20、of newcomers may have contributed to the states high inflation ratesas demand for housing and goods increased.Still,despite these rising costs,the statecontinues to attract new residents.Migration to the Phoenix CBSA tends to be seasonally driven,with fewer peoplemoving in the spring and migration p

21、icking up again in the summer,fall,and winter.Between January 2021 and January 2023,the metro area saw a positive net migrationof 1.6%,which may have contributed to Phoenixs higher than average inflation rate.But the fact that the high inflation didnt slow down migration suggests that otherfactors,s

22、uch as the citys strong economy and job market including Phoenixsgrowing tech scene may offset the impact of inflation on migration patterns.2023 Placer Labs,Inc.|More insights at placer.ai|7Higher Inflation,But Lower PricesAnother factor offsetting Phoenixs high inflation is the areas relatively lo

23、w baselinecost of living.Inflation increases the cost of goods and services,but the impact ofinflation on prices doesnt just depend on the inflation rate the initial baseline costof goods and services also determines how much these goods and services will costpost-inflation.According to Forbes Cost

24、of Living Calculator,the top five origin cities to the PhoenixCBSA all have significantly higher costs of living than Phoenix does.The cost of livingin Seattle,WA,for example the most popular origin CBSA to Phoenix betweenJanuary 2022 and January 2023 was estimated to be 30%higher than that ofPhoeni

25、x,despite Arizonas higher inflation rate.Phoenixs population boom couldindicate that some individuals and families looking to relocate to more affordablelocations are focusing more on cost of living,and less on inflation trends.2023 Placer Labs,Inc.|More insights at placer.ai|8Phoenixs population bo

26、om could indicatethat those looking to relocate to moreaffordable locations are focusing more oncost of living,and less on inflation trends.So even though inflation in Phoenix is higher than it is in Seattle,the overall cost ofliving remains lower thanks to Phoenixs initial low baseline.With remote

27、and hybridwork here to stay,cities with lower cost of living may well continue to attract peoplelooking to stretch their budgets and get the most bang for their salary.Heading Down to the Sunshine StateFlorida was the countrys fastest-growing state in 2022 a particularly noteworthy featgiven that Fl

28、orida is already the third-most populous state in the country.The statescombination of sunny,tropical weather,low tax burden,and affordable cost of livinghave made it an attractive place to move.2023 Placer Labs,Inc.|More insights at placer.ai|9One of the fastest-growing cities in the Sunshine State

29、 is Tampa,which,like Phoenix,is quickly becoming a tech hub.Also similar to Phoenix,Tampa has one of the highestinflation rates in the country perhaps driven in part by the recent inboundmigration.And,much like with Phoenix,the rising inflation rates in Tampa do notseem to be tempering inbound migra

30、tion Tampa saw net positive migration of 2.6%between January 2021 and January 2023.Floridians Are Staying LocalLike with Phoenix,people moving to Tampa are also coming from CBSAs with a highercost of living than that of Tampa.The top five origin CBSAs for people moving toTampa were New York,Miami,Ch

31、icago,Philadelphia,and Minneapolis all cities witha higher cost of living than Tampas.This suggests,or perhaps reaffirms,that many ofthose relocating whether to Phoenix,Tampa,or a different city are looking to takeadvantage of the lower cost of living.2023 Placer Labs,Inc.|More insights at placer.ai

32、|10The Interplay of Inflation and MigrationEven as the price for housing and basic goods and services increased throughout thecountry,the cost of living still exhibited significant regional variation.And theseregional variations seem to be driving many of the recent domestic migrationpatterns,which

33、have been characterized by a movement from areas with higher HHIsto areas with lower HHIs,and from areas with a higher cost of living to areas with alower cost of living.With many people no longer commuting to the office five days a week,a significantnumber of individuals and families seem to be cho

34、osing to relocate to areas wheretheir dollar can go further.And,in turn,the inbound migration to these affordableregions seems to be driving economic growth and creating new employment andcommerce hubs.Key Takeaways 2023 Placer Labs,Inc.|More insights at placer.ai|111.Migration Patterns Mostly Remai

35、ned Constant Between 2021 and 2022:Sunbelt states like Arizona and Florida and states with lower populationdensity such as North Dakota,Montana,and Wyoming,continue to seepositive net migration.Meanwhile,the negative net migration out of statesdominated by larger cities such as California and Illino

36、is continued.2.A Continued Shift from Higher Income States to Lower Income States:Thestate-by-state origin-to-destination HHI ratio highlights that people are movingfrom states with higher median HHIs to states with lower HHIs.This seems toindicate that many are choosing to relocate to areas where t

37、heir income cango further.3.Higher Rates of Inflation,But Lower Overall Costs:States experiencing highmigration rates tend to see high inflation levels perhaps due in part tonewcomers coming from states with higher incomes and driving up costslocally.Still,many metro areas with high inflation still boast alower-than-average cost of living,and the high local inflation does not seem tobe tempering inbound migration to these areas.2023 Placer Labs,Inc.|More insights at placer.ai|12