Redfin Reports Pandemic Boomtowns Phoenix and Miami Have Among the Highest Inflation Rates in the U.S.

(NASDAQ: RDFN) —The four U.S. metropolitan areas with the highest inflation rates in the third quarter are migration hotspots, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Phoenix, Atlanta, Tampa, FL and Miami experienced double-digit inflation and all ranked near the top of Redfin’s list of most popular destinations for relocating homebuyers.

In Phoenix, the price of goods and services rose 13% year over year on average, the highest inflation rate among the metros for which the U.S. Bureau of Labor Statistics (BLS) provides inflation data. Phoenix was the sixth-most popular destination for Redfin.com users looking to move from one metro to another in the third quarter.

Atlanta, the 15th most popular destination, had the second highest inflation rate, at 11.7%, and Tampa (10.9%) clocked in at number three for inflation and number five for migration. Miami had the fourth highest inflation rate (10.7%) and was the second most popular migration destination. Nationwide, the inflation rate was 8.3% in the third quarter.

The places homebuyers are leaving have the lowest inflation rates. Prices in San Francisco rose 5.7% in the third quarter, the lowest inflation rate among the metros Redfin analyzed and less than half the rate of Phoenix. The Bay Area was number one on the list of places Redfin.com users looked to leave in the third quarter. New York had the second-lowest inflation rate (6.4%) and was number three on the list of metros homebuyers looked to leave.

Inflation and migration have become increasingly linked. Remote work allowed scores of Americans to move to the Sun Belt during the pandemic in search of affordability and warm weather, which drove up housing prices, a key contributor to inflation. That’s why migration hotspots now have the highest inflation rates—a trend that was much less acute before the pandemic. In 2019, for example, Los Angeles had the second highest inflation rate, but it was losing residents.

“The pandemic triggered a great rebalancing of affordability,” said Redfin Deputy Chief Economist Taylor Marr. “Americans left pricey coastal job centers and moved to more affordable places in the Sun Belt, but now those more affordable places are seeing affordability erode faster than anywhere else in the country. Some of these areas may lose their titles as top migration destinations in 2023 as a result.”