Migration Just Turned Against Housing
If you’re relying on home equity appreciation or perpetual housing demand over the next decade, you need to rethink the thesis.
The housing market is not being broken by interest rates.
Not by the Fed.
Not even by inventory alone.
It’s being broken by demographics and migration — and those forces are already moving against housing in a way most people are not prepared for.
This isn’t a short-term cycle story.
It’s a long-term demand story.
Migration & Immigration Story Here
The Buyer Problem No One Wants to Talk About
Every real estate market eventually comes down to one question:
Who is the next buyer at this price?
For years, housing demand was propped up by:
Massive domestic migration into Sun Belt states
Elevated international immigration
Rapid household formation
Cheap leverage that made the math “work”
That entire framework is now unraveling at the same time.
Millions of owners are aging out.
Millions fewer buyers are aging in.
The housing market you think you’re investing in is not the housing market that’s coming.
Domestic Migration Has Collapsed
Domestic migration in 2025 is frankly horrendous.
States like South Carolina, Idaho, and North Carolina saw modest net inflows — but the former darlings of the pandemic boom are no longer leading.
Florida? About 0.1% net domestic migration.
Texas? Sharply slowed.
New York, California, Hawaii, and Alaska? Still bleeding residents.
This matters more than most people realize.
States with aging populations require constant inbound migration just to keep housing demand flat. When that migration stalls, the math breaks quickly.
And that’s exactly what we’re seeing.
Florida & Texas: Demand Pulled Forward, Then Disappeared
Migration into Florida and Texas has now fallen to the lowest levels since 2010.
What looked like an endless demand surge from 2020–2022 was really something else:
The pandemic pulled five years of migration into roughly two years.
We didn’t have a housing supply shortage.
We had a temporary demand spike.
Builders responded by overbuilding.
Investors assumed buyers would always be there.
Now the buyers are on the margins — and the supply remains.
In Florida alone, net domestic migration is down roughly 93% from peak levels.
That’s not a slowdown.
That’s a demand cliff.
Affordability Always Wins (Sentiment Loses)
This is the part that makes people uncomfortable:
The math actually matters.
When prices, insurance, taxes, HOA fees, and interest rates all rise faster than wages, demand eventually collapses.
Florida used to work because:
No state income tax
Reasonable home prices
Manageable insurance costs
Acceptable wage-to-cost ratios
That math no longer works for most buyers.
And the market is reacting accordingly.
Immigration Is Slowing Too
Domestic migration isn’t the only problem.
International immigration — another key housing demand driver — is slowing as well.
California, New York, Texas, and Florida have all seen sharp drops in international inflows compared to prior years.
In some cases, net international migration has even turned negative.
These are typically high-value buyers.
Losing them matters.
When both domestic and international demand weaken at the same time, there is no demand backstop.
Household Formation Is at a 9-Year Low
Here’s where the long-term picture gets ugly.
Household formation in the U.S. has dropped to a nine-year low.
According to Harvard Joint Center for Housing Studies projections:
Household growth from 2035–2045 is expected to be the slowest in 100 years
The U.S. may add as few as 5.1 million households per decade
That’s less than half the pace seen in recent history
At the same time:
Millions of baby boomers are aging out of homeownership
Birth rates are declining
Younger households are forming later — or not at all
We already have roughly 15 million vacant housing units nationally.
The question becomes unavoidable:
Who is going to live in all of these homes?
Inventory Is Already Telling the Story
In Jacksonville, Florida:
Active listings have risen from ~2,000 in 2022 to ~12,000 today
Builders continue delivering projects that were started years ago
Entire communities sit partially vacant
Roughly 22% of listings expired at year-end, creating pent-up supply
This isn’t because buyers “don’t want homes.”
It’s because they can’t afford them.
That distinction matters.
The Market Is Uneven — But This Spreads
Right now, parts of the Northeast are still holding up better than the Sun Belt.
But that divergence doesn’t last forever.
Aging housing stock
Insurance pressures
Demographic headwinds
Those forces eventually show up everywhere.
Florida, Texas, and parts of California are simply feeling it first.
This Is Not a Rate Story
Rates matter — especially for speculation — but they’re not the core issue.
Even if rates fall:
The next buyer may not exist
Or they may be priced out
Or they may require family assistance just to enter the market
That is not a healthy demand structure.
Real estate is illiquid.
Corrections take time.
Mean reversion doesn’t happen overnight.
But the direction is becoming clearer.
The Question Going Forward
Over the next 10–20 years:
Does housing face a structural demand problem?
Do prices stagnate or decline in high-cost, aging markets?
Do affordability and demographics override everything else?
And most importantly:
How does this change your strategy?
Because the biggest risk in real estate isn’t volatility.
It’s building your plan around a buyer who never shows up.
e: jon@movewithmomentum.com
