Migration slows under pressure of rate lock-in, cooling job market

Americans are moving less in 2025, with overall migration still well below pre-pandemic levels, according to a new report from Bank of America Institute. The number of people who are moving remains significantly lower than before the pandemic – down almost 20% in the first quarter of 2025 compared to the first quarter of 2020, the report said.

While some signs of recovery appeared earlier this year, those gains have not been sustained in the second quarter.

The study — based on anonymized internal account data — found year-over-year drops in both city-to-city moves and moves within the same metro area.

Declines were especially sharp for relocations within a single city.

South and Midwest cities see more inflows

Despite the slowdown, some cities continue to attract new residents.

Indianapolis and Columbus, Ohio, topped the list of fastest-growing metros, while Austin, Texas, and San Antonio also drew steady inflows.

By contrast, many Western and Northeastern metros saw outflows.

Florida — once a major migration magnet — has also cooled, with Miami, Orlando and Tampa all recording net departures.

Bank of America Institute noted that overall inflows and outflows look to have cooled relative to Q1.

Younger movers are pulling back

Generationally, Gen Z and Millennials still account for about half of cross-city moves. But their share has slipped over the past year, while Baby Boomers and older generations have made up a slightly larger portion of relocations. One likely explanation is a softening job market.

More than 40% of respondents to Bank of America’s 2024 Homebuyer Insight Report said they were likely to move across states for job reasons — a clear driver of longer-distance housing moves.

The lock-in effect

Housing supply is another constraint. While new construction has improved, existing home listings remain limited. A major factor is the “lock-in effect” — homeowners holding mortgages with rates far below current levels, making them reluctant to sell and take on higher borrowing costs.

“Selling and resetting their mortgage would mean a significant rise in costs – so they are choosing to sit tight instead, keeping supply depressed,” the Institute said.

The effect is most pronounced in the West, where a large share of households have sub-5% mortgage rates and many devote more than 30% of their income to housing payments. These dual pressures make it especially difficult for owners to consider selling.

The report found similar challenges in New York, Washington, D.C., Miami and Austin, where high mortgage burdens and limited willingness to list homes constrain market activity.

No quick rebound expected

Although housing supply from new builds is improving, Bank of America Institute cautioned against expecting a swift turnaround in mobility.

Over time, so-called “forced moves” — triggered by life events such as job changes, divorces or deaths — are projected to gradually erode the lock-in effect.

“While the good news is that housing supply is improving, particularly for new builds, the lock-in factor in parts of the country – especially the West – will likely remain a constraint,” the Institute said.