Pandemic Migration Patterns Shift as Costs Rise in Relocation States

Recent data indicates a significant reversal in pandemic-era migration patterns as Americans move back to the East Coast and California due to rising costs in previously popular states like Texas, Florida, and Idaho. Conning’s annual State of the States Report highlights this shift, showing notable gains in the Northeast, where states such as Rhode Island, New Hampshire, and Vermont have seen improved rankings. In contrast, states like Delaware and Hawaii have fallen significantly in the rankings.

Texas and Florida, which previously attracted many new residents, are now experiencing a decline in rankings due to higher costs and decreased housing affordability. Texas, in particular, dropped five spots due to poor tax revenue growth and a decline in housing prices. Conversely, states in the Northeast are benefiting from increased tax revenues and robust population growth, with Rhode Island making the most significant leap in the rankings.

Employment growth remains strong across most states, with significant gains in South Carolina, Nevada, and Alaska. However, some states are facing challenges as population growth outpaces job creation, potentially leading to higher unemployment rates. Overall, Conning’s outlook for state credit quality in 2024 is stable, supported by substantial rainy-day funds that provide a buffer against inflation and rising costs.