Key Findings
- On average, the cities we analyzed saw populations grow 4.3% and home sale prices increase 47.5%, while household income increased just 21.5%.
- Small towns surrounding the cities we analyzed saw home sale prices increase by 48% on average while household income increased by 20.1% on average.
- 92% of our 66 cities had a price-to-income ratio of over 2.6, meaning it would take the median household more than 2.6 years of income to purchase a home in their city. Comparatively, just five cities had 2021 sale price-to-income ratios below the commonly recommended 2.6.
- On average, sale price-to-income ratios across these cities increased 21.3%. Small towns surrounding the 66 cities saw sale price-to-income ratios increase by 26.1% on average.
- Of the 66 cities, North Port, Fla., experienced the most population growth, increasing 18.5% from 2017 to 2021. Small towns surrounding North Port saw sale price-to-income ratios increase by an average of 18%.
- Sale price changes most outpaced median income changes in Bridgeport, Conn., growing seven times faster than income.
How Have Migration Trends Impacted Major Cities?
We ranked 66 cities of the most populous metro areas that had positive population changes from 2017 to 2021. We ranked each city by population increase and home sale price-to-income ratio, weighting both measures equally.
Based on our review, 92% of the cities had 2021 sale price-to-income ratios that exceeded the commonly recommended ratio of 2.6, with an average of 3.9 in the top 10 most impacted cities. The average city saw a price-to-income ratio increase of 21.3%.
The top 10 cities saw an average population increase of 9.3% and an average ratio increase of 38.7%. Five of those cities are in the South Atlantic region, primarily in Florida, with an average population growth for the South Atlantic region of 13%, and an average ratio growth of 14.3%.
North Port, Fla., saw the highest population increase of all 66 cities we ranked at 18.5% while its sale price-to-income ratio grew 17.9%.
Rochester, N.Y., one of the three top 10 cities in the Northeast, saw a 1% population growth but had the largest ratio increase at 130%.
Big Cities Where Home Prices are Outpacing Income the Most
All 66 cities we examined saw population growth and most had higher-than-recommended price-to-income ratios. Let’s look closer at how income and sale prices changed and where they changed the most.
Sale prices increased an average of 47.5% across our 66 cities, while income increased by 21.5%.
Among the 10 cities where sale prices most outgrew income, seven are along the East Coast, including six in the Northeast. Those East Coast cities saw an average sale price increase of 79.1% — almost five times higher than their average income growth of 16.8%.
Bridgeport, Conn., saw the greatest disparity in sale price and income growth, as its sale price increased 86.8% — seven times faster than the city’s 11.5% income increase.
Is Urban Sprawl Impacting Small Towns Outside These Cities?
These migration trends have also impacted the small towns surrounding the 66 cities we examined. Small towns around the major cities saw an average population increase of 6.9% and an average home sale price increase of 48% — over twice the 20.1% average household income increase.
The average sale price-to-income ratio increase in these small towns was 26.1%, almost 5% higher than the average for the major cities.
Small towns around the top 10 cities saw home sale prices grow an average of 60.6% while household income rose by an average of just 26.8%. In these small towns, the price-to-income ratio increased by an average of 30.2%.
Post-Pandemic Migration Outlook
Impactful migration trends due to the COVID-19 pandemic may already be returning to pre-pandemic norms, the U.S. Census Bureau reported. In 2022, some regions in the U.S. began showing signs of rebounding populations, the Bureau said in a March 2023 report.
However, some trends may stick around, as office attendance was still 30% lower than pre-pandemic levels at the end of 2022, according to the McKinsey Global Institute. While some companies have returned to in-office-only operations, others are embracing remote or hybrid practices which could lead to continued migrations out of major metros and into small towns.
Methodology
The research team at MarketWatch Guides compared 2,370 small towns and the nearest major cities within 66 metropolitan areas across the U.S. We aimed to determine which cities and surrounding small towns have been affected by population growth and increasing home prices. The selection criteria for small towns included falling within a metropolitan area that experienced population growth between 2017 and 2021, with town populations ranging from 500 to 25,000 in 2017. We also considered the following metrics:
- Percent Change in Population: Data was taken from the 5-Year ACS and compared populations in 2017 and 2021 to determine which areas saw the most growth.
- Percent Change in Sale Price-to-Income Ratio: The median sale price of homes divided by the median household income for each geographic area, calculated for both 2017 and 2021. The ratio indicates how many years of household income are needed to afford a home. Household income comes from the 5-Year ACS and sale price was taken from Redfin.com.
Questions about our study? Please contact the team here.
Full Data
You can view the full dataset below.
Harrison Pike is a contributing reporter specializing in data-driven news coverage. His work has been featured in the Birmingham Business Journal and Air Cargo Next.
Tori Addison is an editor with over five years of experience in the digital marketing industry. Her includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.