Housing Morsel

Red hot region: what is driving the Sun Belt boom?

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Anna Zhou

March 2023

Key takeaways

  • Beneath the surface of the aggregate US housing trends, we find meaningful variations between major Metropolitan Statistical Areas (MSAs). For example, in February median rent and mortgage payments for all Bank of America customers were up 8% and 7% year-over-year (YoY), respectively, but some Sun Belt cities are seeing a much bigger surge.
  • In Phoenix, median rent payment grew by a staggering 26% YoY in February on a six month moving average basis, compared with just 2.5% in San Francisco, according to Bank of America internal data. Mortgage payments show a similar regional divide.
  • So why have some MSAs experienced a much bigger housing boom than the others? The underlying reason may be complex but we propose some potential explanations: domestic migration driven by affordability, above- average employment gains and an increasing share of higher paid jobs.

Read our full analysis for a more in-depth look at these trends.

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