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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 74 J O U R N A L May 2023 Redfin reports the pool of homes available to homebuyers is shrinking quickly because new listings are scarce. New listings fell 21.8% from a year earlier nationwide during the four weeks ending April 2, one of the biggest drops since the start of the pandemic, contributing to an unseasonal early-spring decline in the total number of homes for sale. Many homeowners are staying put because they're unwilling to give up their low mort- gage rate. Although average 30-year mortgage rates posted their fourth-straight decline this week, dropping to 6.28%, that's more than double the sub-3% rates common in 2021. SUN BELT DESTINATIONS MOST POPULAR AMONG HOMEBUYERS LOOKING TO RELOCATE T he number of redfin.com home searchers looking to relocate to a new metro fell 3.6% year over year in Feb- ruary, according to a new report from Redfin. That compares with a 14.4% drop in redfin.com home searchers looking to relo- cate within their current metro. Those are both the biggest declines in Redfin's records, which go back through 2018. The rise in mortgage rates over the last year has made purchasing a home more ex- pensive almost across the board, but elevated rates often aren't as big of a deterrent for relo- cating homebuyers because they're typically moving to more affordable areas. A person moving from Los Angeles to Las Vegas could buy a home comparable to the one they're selling in Los Angeles for half the price. High rates don't impact that homebuyer as much because they're getting a cheaper house and may be using proceeds from a home sale in a more expensive area. People moving from one part of the country to another may also be doing so for a high- er-paying job, which would help offset high mortgage rates. Additionally, homebuyers relocating to a different part of the country may have a non-negotiable reason for their move: Maybe they are moving for that higher-paying job or to be closer to family. High rates are less likely to deter those homebuyers than ones simply considering a different house within the same town. One-quarter (25.1%) of house hunters nationwide looked to relocate to a new metro in February, a record high. That's up from 22.9% a year earlier and roughly 18% before the pandemic. Relocators made up a bigger portion of homebuyers than ever because elevated mortgage rates, still-high home prices, infla- tion and economic uncertainty are moti- vating the few people who are still buying homes to move to more affordable areas. Remote work has also made it more feasible for Americans to relocate. Miami; Phoenix; Las Vegas; Sacramento, California; and Tampa, Florida were the most popular destinations for house hunters looking to move to a different metro in February. Other parts of Florida and a couple Texas metros round out the top 10: Orlando, Cape Coral, Dallas, North Port-Sarasota, and Houston. Pop- ularity is determined by net inflow, a measure of how many more redfin.com users looked to move into an area than leave. Relatively affordable Sun Belt metros perennially top the list of places people are looking to move, due mainly to their compar- atively cheap housing and warm weather. While homes in these places cost considerably more than pre-pandemic, they remain comparatively affordable. The typical home in most of the popular destinations is less expensive than the typical home in the top origins. The typical Miami home sold for $485,000 in February, compared with $640,000 in New York, the most common or- igin for homebuyers looking to move in. And the typical Phoenix home sold for $425,000, compared with $710,000 Seattle, the most common origin. "For buyers coming from the Bay Area or another expensive place, homes in Phoenix seem cheap. That's why out-of-towners are still buying homes even though rates are high," Phoenix Redfin agent Heather Mah- mood-Corley said. "Desirable, well-priced homes are selling quickly, sometimes with a bidding war—largely because there are still so many buyers moving in from out of town." Homebuyers looked to leave San Fran- cisco, New York, and Los Angeles more than any other metro in February, followed by Washington, D.C., and Chicago. This ranking is determined by net outflow, a measure of how many more redfin.com users looked to leave a metro than move in. While San Francisco tops the list of places people are looking to leave, fewer homebuyers are leaving than a year ago. That may be partly because Bay Area home prices are falling. Expensive coastal job centers typically top the list of places people are leaving. That trend became more pronounced in recent years as remote work allowed homebuyers to relocate to more affordable areas.