A growing number of Americans packed up and moved south in 2022, while bailing out of New York and California.
Texas saw the largest net population gain for the one-year period ending July 1, 2022, with more than 450,000 people moving to the state, according to a new report from analysts led by Rafe Jadrosich at Bank of America Global Research.
The firm cited data from the US Census Bureau data and U-Haul rates in building its report.
Florida saw the second-largest net population gain over this period, as more than 400,000 people moved to the Sunshine State.
In contrast, both California and New York saw net population drops north of 300,000 over that period.
On a regional basis, the South saw its population grow fastest, jumping by 1.1%, or roughly 1.4 million people over the last year.
The South benefited from domestic migration that saw 870,000 leave their state in another region for the South, a trend some industry experts have dubbed the “Sun Belt migration.”
By state, Texas, Florida, North Carolina, Georgia, Arizona, South Carolina, and Tennessee were the biggest gainers in terms of net population growth, according to Bank of America.
Florida, Texas, and North Carolina also saw the largest increases in net domestic migration — or people moving from one state to another — with these states adding 319,000, 231,000, and 100,000 new residents from other states, respectively.
In contrast, some 343,000 Californians fled the state for another while 300,000 New Yorkers did the same. Illinois saw the third-highest number of net domestic population outflows, with 142,000 people leaving the state for another.
Americans flocking to the Sun Belt region is not a new trend, but was expedited during the pandemic. The option to work remotely gave a number of residents a reason to look for more affordable housing, better weather, and tax incentives.
A report from moving company U-Haul found that Texas, Florida and the Carolinas were the preferred one-way destinations last year.
Separately, another indicator of migration, the USPS migration index, found a slowdown in markets homebuilders like DR Horton (DHI) and PulteGroup (PHM) are exposed to, including the Dallas, Houston, Atlanta, and Phoenix metros.
Still, movement to these areas is still tracking above pre-COVID levels.
In Jadrosich’s view, these homebuilders remain well-positioned given their exposure to these regions, and the firm maintains a Buy rating shares of both DR Horton and PulteGroup.
Earlier this year, Jadrosich and his team upgraded shares of three homebuilder stocks, including Pulte, Lennar (LEN), and Toll Brothers (TOL), with the view that lower input costs, moderating interest rates, and a “home price correction rather than a crash” would bolster these stocks in 2023.
Over the last six months, shares of all three companies are up more than 15%.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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