Wealthy people keep ditching California and New York for Florida and Texas — but their moves could actually hurt the South's biggest draw
Americans earning $200,000 or more move to Florida and Texas the most, a new study found. But the South's reputation for affordability may be at risk.
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- High-earning Americans are ditching New York and California for Florida and Texas, a study found.
- Southern states attract wealthier people in part because of their relatively lower cost of living.
- But as more people move to these states, their housing prices rise, which can make them less cheap.
Higher living costs can stress out Americans making any amount of money.
In response, many people move to areas that they believe offer better value for money and a higher quality of life.
The American South is one of the top destinations for movers, according to Census migration data and other data.
It's no different for some of America's highest earners.
People earning $200,000 a year or more are largely relocating to southern states, with the most net movers heading to Florida, Texas, North Carolina, and South Carolina, according to a July 2024 study by personal-finance site SmartAsset.
SmartAsset's analysis of tax-filing data from 2021 and 2022 reveals that Florida was — indisputably — the top destination for affluent Americans, gaining 29,771 high-income households.
Florida is followed by Texas, with a net increase of 8,260 households making over $200,000 a year. North Carolina and South Carolina ranked third and fourth, respectively, with gains of 5,792 and 5,270 high-income households.
These high earners are most often leaving California, New York, Illinois, and Massachusetts — all higher-tax states in the Northeast, Midwest, or West Coast.
California experienced the largest exodus of high earners, with a loss of 24,670 high-income households. New York, Illinois, and Massachusetts followed, with losses of 12,040, 9,292, and 4,392 high-income households, respectively.
The causes — and effects — of wealthier people moving to the South
People who have moved to the South have told Business Insider that their primary motivations include better job opportunities, more tax- and business-friendly environments, and nicer weather.
One of the main draws, though, is the South's lower costs of living.
However, the South's long-standing reputation for affordability may eventually be complicated, especially in states like Texas and Florida, where a surge in new residents has driven up expenses, including utilities, gas, and housing.
A separate analysis of IRS tax data by SmartAsset, prepared for Bloomberg earlier this year, shows that people who moved from New York to Florida and Texas in 2023 may not be saving as much money as those who made the same move in previous years.
SmartAsset found that people earning $250,000 who moved from New York to Miami saved 28% less in 2023 than they would have if they moved in 2019, with annual savings dropping from $122,956 in 2019 to $88,036 in 2023.
For those who moved from New York to Austin and Dallas, the situation is parallel: people earning $250,000 annually saved 20% and 25% less, respectively, in 2023 compared to 2019.
Indeed, newcomers to these states can sometimes see their savings eroded — most significantly by rising home prices and rents.
In June, the median home price in Manhattan was $1.6 million, compared to $655,000 in Miami, according to Realtor.com. It's still relatively cheaper in Florida.
However, home prices in Miami surged 43.7% from 2019 to 2023, surpassing the national increase of 33.7% over the same period, according to SmartAsset. Manhattan saw home prices bump, too, but by 29.3%.
During the same period, SmartAsset found, rents in Miami rose nearly 38%, while Manhattan rents climbed 3.3%.
Austin's housing market is experiencing a similar trend, with a 25.5% increase in rents and a staggering 55.6% surge in home prices from 2019 to 2023.
"The inflation over the last few years has impacted Manhattan less than Miami, Dallas, and Austin," Jaclyn DeJohn, SmartAsset's managing editor of economic analysis, told Bloomberg. "The real, or inflation-adjusted, purchasing power saved when moving from Manhattan to any of the three cities has actually decreased."