Where Renters Are Moving

When people cannot—or do not want to—pay today’s home prices, they often remain renters longer. But that does not necessarily mean they stay where they are. Increasingly, renters are looking outside their current markets for more affordable places to live.

That shift could create opportunities for investors in markets that are attracting these renters.

Renters Are Looking Outside Their Local Markets

According to Zillow, Buffalo, New York; Chicago; and Houston are seeing some of the largest increases in out-of-town rental searches. New Orleans and Dallas are also seeing significant increases.

Even more interesting, some markets that have already experienced substantial migration—including Salt Lake City, Raleigh, Hartford and Nashville—are now seeing more rental searches coming from outside the market than from within it.

I pay attention to this because rental demand can be an early indicator of where people are moving. Before someone buys a house, they often rent first. That means an increase in rental searches from people outside a market can provide an early indication of future population growth.

I look at it this way: people generally don’t search for apartments or rental houses in another city unless they are seriously considering moving there.

When Zillow sees an increasing percentage of rental searches coming from outside a metropolitan area, it can indicate a developing pipeline of potential newcomers.

That is particularly interesting in markets such as Buffalo and Chicago, where out-of-town searches are increasing significantly.

Affordability Is Driving the Migration

One of the biggest reasons renters are looking elsewhere is simple: affordability.

The national median price of an existing home sold in July was $434,100, according to the National Association of Realtors. Buffalo, Chicago and Houston all have lower median home prices, according to Realtor.com.

That matters because housing affordability doesn’t just influence whether someone buys a house. It influences where they choose to live in the first place.

A renter living in an expensive coastal market may discover that moving several hundred miles can dramatically improve his or her housing situation.

The same income that might barely cover a rental in one market can provide considerably more housing in another.

That creates an incentive to move.

And investors should be watching that movement.

Rents Are Starting to Rise Again

For the past several years, rising housing supply in many markets helped moderate rent growth. That trend now appears to be changing.

Apartment List reported that rents turned positive on a month-to-month basis in August for the first time in four years, although rents remained slightly below August 2025 levels.

I don’t think investors should interpret one month’s increase as proof that rents are entering another major boom. But I do think the change in direction is worth watching.

After several years of significant new apartment construction, particularly in the Sunbelt, the market is beginning to absorb some of that supply. If population growth continues while new construction slows, rental demand could strengthen further.

For investors, the direction of rents may be more important than the absolute rent level.

A market where rents are $1,300 and increasing may ultimately be more attractive than a market where rents are $1,700 but declining.

New York Renters Are Looking South

People don’t necessarily move because another city is better. They often move because the financial equation is better.

Someone paying $3,000 or $4,000 a month for housing in a high-cost market may look at a $1,500 or $2,000 rental in another city and realize that the savings can be substantial.

That difference can affect everything from housing costs to disposable income and ultimately quality of life.

The South Continues to Benefit

The South continues to attract people who are looking for a combination of affordability, employment opportunities and lifestyle.

Despite the enormous migration into the South during and after the pandemic, many Southern markets remain considerably more affordable than major markets on the East and West coasts.

And migration hasn’t stopped.

RentCafe recently ranked its best cities for renters, evaluating factors such as cost of living, renter income growth and employment growth. Thirty-seven of its top 50 cities are located in the South.

The top three were McKinney, Texas; Huntsville, Alabama; and Austin, Texas.

For real estate investors, that is an important distinction.

I am less interested in simply identifying a city that is experiencing population growth. You want to know whether the people moving there can afford the housing you intend to provide.

Population growth without sufficient income growth doesn’t necessarily produce a strong rental market.

But population growth combined with employment growth, rising incomes and limited affordable housing can create a much more compelling investment environment.

What This Means for Real Estate Investors

I think investors should be paying particularly close attention to where renters are searching before they start buying.

There are several reasons.

1. Rental demand can precede home-price appreciation

If renters begin moving into a market, that can eventually create additional demand for homes.

Some of those renters will eventually become buyers. Others will remain renters for years.

Either way, landlords benefit from a larger potential tenant pool.

That doesn’t mean investors should automatically buy in every high-migration market. But migration can be an important piece of the market-selection puzzle.

2. Affordability can become an investment advantage

Investors often focus on appreciation when evaluating markets.

I think affordability deserves just as much attention.

If a household can afford to rent a three-bedroom house for $1,500 in one market versus $3,000 in another, the lower-cost market has a significant competitive advantage when people are deciding where to live.

That can support rental demand even if the market isn’t experiencing spectacular home-price appreciation.

3. Follow the renter before following the buyer

One mistake investors can make is waiting for migration to become obvious in home-sale statistics.

By the time everyone is talking about a market’s population growth, investors may already be competing aggressively for properties.

Rental-search data can potentially provide an earlier signal.

If people in expensive markets begin searching for rental housing somewhere else, I want to know why they are looking, where they are coming from and what they can afford.

Those answers can tell me much more than simply knowing that a city’s population is growing.

4. Don’t confuse migration with a good investment

This is where I would be careful.

A growing population doesn’t automatically make a market a good place to buy investment property.

You still have to buy correctly.

I would look at:

• Purchase price relative to market rents
• Rent-to-price ratios
• Property taxes and insurance
• Employment and wage growth
• Vacancy rates
• New housing construction
• Neighborhood-level crime and economic conditions
• Property condition and renovation costs
• Long-term rental demand
• Financing costs
• Potential exit strategies

.

The numbers still have to work.

A market can attract thousands of new residents and still produce poor investment returns if investors overpay for the houses (think Boise or Austin).

5. Affordable housing may become increasingly important

Perhaps the biggest opportunity is in the middle of the market.

There is a tremendous amount of attention on luxury apartments, new construction and high-end housing. But many households simply need a reasonably priced place to live.

That is particularly important when home prices remain elevated.

If renters cannot afford to buy, they remain renters.

And if they are also willing to move to another city to find more affordable housing, investors who provide reasonably priced rental housing may benefit from that migration.

The Bottom Line

I don’t think investors should simply chase the cities with the highest population growth.

Instead, I would follow the money.

Where are people moving from?

Why are they leaving?

Where are they going?

What are they earning?

What can they afford to pay for housing?

And, most importantly, can you buy an investment property in that market at a price that produces an acceptable return?

The migration of renters from expensive markets into more affordable markets could become increasingly important as long as home prices remain elevated.

For investors, that creates an opportunity to look beyond the traditional “hot markets” and identify places where affordability, employment and rental demand are coming together.

Sometimes the best investment opportunity isn’t where everyone is moving today.

It may be where renters are starting to look before everyone else realizes they’re coming.