Current trends show that young Americans are leaving large cities and moving to suburban areas while still maintaining the ability to reach state capitals easily. As a result, housing in smaller suburban communities located no more than 90 miles from major cities and state capitals is becoming increasingly popular.

Reasons for Migration

The main reason for this migration is the rising cost of real estate in large US cities. For young professionals just starting their careers, housing expenses account for over 30% of their income. According to a study by Clever, in 2024, none of the 50 largest metropolitan areas offered housing that was affordable for workers earning minimum wage. In some cities, like Buffalo (New York), St. Louis (Missouri), and Hartford (Connecticut), the percentage of income spent on rent is 39%, 46%, and 48%, respectively.

In the US, housing costs in suburban areas are often lower than in state capitals. For example, real estate prices in Brooklyn and Queens are cheaper than in Manhattan. However, in some states like California, housing prices in suburbs are often comparable to or even higher than in the state capital.

In addition to price, another significant factor driving migration is the growing desire among young Americans to buy their own homes rather than paying rent. The real estate market in large cities cannot offer affordable housing options. For example, home prices in New York City and its suburbs, such as Irvington, New Jersey, vary significantly.

In New York, especially in Manhattan, real estate prices are among the highest in the country, reaching up to $1.6 million. Meanwhile, the average price of a home in Irvington is around $400,000, which, while still expensive for the average American family, is much more affordable.

As mentioned, young people are choosing to live in smaller towns, away from the hustle and bustle of large cities, but still within easy commuting distance. Popular destinations include Georgetown (Texas), Boulder (Colorado), and Manchester (New Hampshire). Suburbs are well-developed in terms of infrastructure, which, combined with lower housing costs, makes them popular due to excellent transportation links with major cities.

Other trends:

  • Rural areas. Remote areas and rural locations offer low housing costs and an environmentally clean setting. However, such properties are most in demand among those who work remotely. An example of this trend is Vermont, where state programs encourage relocation to sparsely populated regions.
  • Overseas relocation. An emerging trend is moving abroad. For remote workers, options range from Portugal to South America. Additionally, professionals working in border states of the US often move to neighboring countries like Mexico or Canada due to lower housing and living costs.

Most demand for housing in bordering countries comes from people working in Texas, Arizona, and California, as medical expenses are significantly lower in Mexico. Canada is popular among residents of Washington, New York, and, to a lesser extent, Michigan, as the overall cost of living in both countries is comparable, but in densely populated US states, living costs remain higher than in Canadian border provinces.

Impact on the Real Estate Market

As the number of new arrivals increases, the local real estate market grows. This has led to a significant rise in property prices in suburbs and small towns across the US. According to data from Redfin, over the past year, the total value of rural housing increased by 7%, reaching $7.8 trillion, while urban areas saw a 6% increase, and suburbs grew by 6.8%, surpassing the $30 trillion mark for the first time.

An analysis by Zillow revealed that property prices in counties across Arizona, Georgia, North Carolina, and Pennsylvania have more than doubled since 2019. However, despite the overall price increase, small towns remain affordable for buyers. For instance, in cities like Decatur (Illinois) and Youngstown (Ohio), median home prices are still within reach for families with an annual income of around $60,000.

Decline in Demand and Prices in Large Cities

The outflow from major cities has led to a decline in demand for housing in metropolitan areas. As a result, property prices have stabilized, and in some cases, they have even decreased. For example, from May 2023 to May 2024, the average home price in the 50 largest cities in the US increased by only 0.3%, a sharp contrast to previous years when growth was between 6% and 13%.

However, the decline has affected only a few cities. Miami (Florida) was the only major US city where property prices dropped by more than 10% in one year (11.2%). Denver (Colorado) saw a 6.3% decrease, Seattle (Washington) experienced a 5.5% drop, Kansas City (Missouri) declined by 4.9%, and Oklahoma City (Oklahoma) fell by 4.3%.

Social and Economic Consequences

Migration leads to accelerated development. In this case, suburbs are expanding, with significant investments being made, including from local budgets. An important aspect is also the adaptation of local infrastructure to meet new realities:

  • Transportation. Increased pressure on roads, public transport, and parking spaces.
  • Education. Schools and daycare centers in popular areas are facing overcrowding.
  • Healthcare. Population growth stimulates the development of the healthcare system, including the construction of hospitals and clinics.

These issues are not due to suburban areas being poorly developed initially. On the contrary, they are well-adapted to the planned number of residents, but the large migration influx has proven to be a factor difficult to predict.

However, there is also the downside of “explosive” migration. For example, Haines City, Florida, has long attracted residents from nearby major cities like Tampa and Orlando. After an extensive advertising campaign in August-September 2024, the city saw a sharp influx of internal migrants from other parts of the US, causing the average price of apartments, townhouses, and penthouses to jump from $190,000 to $240,000 in just one month. The city’s real estate market has not yet stabilized, and over the past six months, prices have been declining by an average of 3%.