The reasons behind a decision to move are often just as fascinating as where people wind up relocating. The United Van Lines 2022 National Movers Study found that career opportunities, proximity to family, and a health considerations were major reasons why and where people moved in 2022. However, the desire to go where home prices are lower and the cost of living less expensive became increasingly top-of-mind, especially during the past year. Here’s why:
In January 2022, the U.S. inflation rate reached 7.5 percent. According to global management consulting firm McKinsey & Company, this decades high rate was a result of a combination of sky-high energy costs, labor mismatches, and ongoing disruptions to the supply chain that were largely due to the impact of the ongoing pandemic.
For American consumers in 2022, this meant a drop in purchasing power and ultimately their current standard of living, especially among retirees and others on lower or fixed incomes. Therefore, it’s quite understandable — even inevitable — that people’s move decisions over the past year increasingly focused on issues of affordability. This was affirmed by the United Van Lines 2022 Annual Movers Study that showed an overall shift from expensive cities and states to lower-density, more affordable regions.
So how did cost of living and inflation affect inbound moves in 2022? For starters, more Gen Xers and Baby Boomers moved last year than any other age groups, with those over 55 accounting for over 55% of all inbound United Van Lines moves. This reflects a desire for individuals in these two groups — emerging empty-nesters and retirees respectively — to downsize and relocate to areas where financial resources for expenses such as utilities, transportation, and groceries could be better leveraged.
For several years previously, United’s study named Idaho as a top destination, with affordability named as one of the major factors behind people’s decision to move there. Surprisingly, the 2022 study found that Idaho had moved out of the top ten completely, with 11.43%. of those in the Gem State relocating due to cost of living and affordability issues. The top five inbound states for movers who named affordability as a top concern are now South Dakota (29.17%), West Virginia (28.57), Kentucky (19.44%), Delaware (16.67%) and Tennessee (16.51%).
Aside from Delaware, most of these states are located in the South. However, the First State’s graduated tax rate, which ranges from 2.2% to only 5.55% on incomes below $60,000 definitely makes it attractive to those looking for an affordable place to live, particularly retirees.
Considering the above, it comes as no surprise that densely populated areas of the country with a more competitive housing market, a higher cost of living and less advantageous tax laws saw the most outbound moves.
In this year’s study, California topped the list of outward-bound moves based on affordability, with 21.91% of those surveyed citing it as a factor, followed by New York (14.88%), Washington (14.29%), New Jersey (13.73%) and Connecticut (13.02%).
No doubt the shift toward remote work also had some impact on this since today’s workers have more flexibility than ever to relocate without affecting their career progression and income. After all, why not move to a less expensive part of the county if you can maintain your current salary and raise your standard of living at the same time? That said, those who leave their current jobs to relocate to a more affordable state or region of the U.S. should also take into account that salaries can be considerably lower outside of major metropolitan areas.