Mar 3, 2022

Where did the most people move in 2021?

Stuart Mason

Despite yet another year living with the implications of the COVID-19 pandemic, Americans were again busy moving between states in 2021. Now, thanks to analysis by U-Haul and United Van Lines, national moving companies, and the Tax Foundation, a think tank, as well as data recently released by the U.S. Census Bureau we have a better sense of just where people were moving and one thing is clear - people spent 2021 fleeing high tax states (particularly cold ones) for low tax states (particularly warm ones). 

Moving Company Indexes

First is the U-Haul Growth Index, which is published yearly by the moving truck rental company U-Haul based on data from over 2 million one way moves conducted in U-Haul rental trucks each year. The Index counts as a “growth state” a state which more one-way U-Haul truck rentals enter a state than leave a state in a calendar year (conversely the index concludes that a state is shrinking if more one-way truck rentals leave the state than enter in a calendar year). U-Haul found that in 2021 that Texas was the fastest growing state, a spot it held in the index for the years 2016-2018. Florida and Tennessee, the previous two years’ fastest growing states, were 2 and 3 respectively in 2021. As for states people were moving out of, California had the greatest rate of outbound moves, followed by Illinois, the second straight year these two states have shared the top two spots. Perhaps unsurprisingly, New York state following closely behind as the 5th most moved-out of state. Overall, the regions that saw the greatest amount of inbound migration were the south and southwest.  

Interestingly, United Van Lines, a national moving company, came to slightly different conclusions as to the most moved-to states, however they still agreed on the states people are fleeing most (with the slight difference in conclusions probably being caused by the coverage area of each individual company). The study, based on United Van Lines’ exclusive data for state-to-state moving patterns, found that the state with the highest percentage of inbound migration was Vermont. The rest of the top five featured two familiar faces, South Carolina at 3 and Florida at 5, and two more potentially surprising states, South Dakota at 2 and West Virginia at 4. However, the states United Van Lines found to be the biggest out-bound states are all found on U-Hauls list as well, finding Illinois to be the biggest out-bound state followed by New York, Connecticut, and California.

Once again warm, low-tax areas like Fort Lauderdale (pictured above) lead the nation in growth.

In addition to the raw moving data, United Van Lines conducted surveys to determine what motivated people to make their moves.  Several of the survey's most interesting findings had to do with retirement. First, the study found that roughly 20% of all people who moved did so because of retirement, up from 13% in 2015. In addition, the study found that while we’ve known for a long time that southern states are particularly popular retirement destinations, in 2021 people moved to less densely populated places than before. So, for example, while people have always loved moving to highly populated areas in Florida like Orlando and Miami, in 2021 they also started increasingly exploring less populated areas like Sarasota and Fort Meyers. Finally, the study concluded that there is currently an “unprecedented” exodus out of the northeast as retirees flee the high taxes and cold weather. For example, the study states that 77% of people nearing retirement age in New Jersey plan on leaving the state after retirement.

The Tax Foundation 2021 Report

Using the above information, as well as data provided by the U.S. Census Bureau, the Tax Foundation, a think tank, conducted its own study into why and where people moved in 2021. The study first noted that while population growth for the country as a whole was relatively flat in 2021, several states including New York, California, and Illinois all lost population while states like Arizona, Texas, and Florida all saw increases in population.

While the study acknowledged that there are many reasons for people to move, it noted the strong correlation between tax burdens and migration. For example, the average combined top marginal state and local income tax rate for the top third of population growth states was only3.5%, while it was almost double at 7.3% for the bottom third of states. Further, six states in the top third for growth do not have a personal income tax (Florida, Tennessee, Texas, Nevada, New Hampshire, and South Dakota), while four states in the bottom third have a double digit income tax (California, New Jersey, New York, and District of Columbia).

Interestingly, the study also noted that nine states in the top third had actually implemented tax cuts in 2021, while New York and the District of Columbia actually raised income taxes in 2021. It’s safe to say that the trend driving population movement - disparity in state taxes - will continue well into the future.

The study also worked to synthesize the three data sets (from U-Haul, United Van Lines, and the U.S. Census Bureau) to determine where people were in fact moving to and from each year, noting that each data set had its own limitations. The Census Bureau data, for example, shows population gains and losses, but not cross border migration. The data from U-Haul and United Van Lines, on the other hand, is less robust but speaks more directly to cross-border migration and helps confirm what is being seen at the Census level. However, the combination these data sets painted a relatively clear picture: that California, Illinois, Massachusetts and New York are losing population, while state likes Texas, Florida and Tennessee are clearly gaining.

These studies ring particularly true at Sunbound, where every day we hear stories of people wanting to leave high tax states to retire to states with low tax burdens and low costs of living (not to mention better weather!).  While no two stories are ever the same, one common, and unexpected theme, is that people want to make sure that their retirement savings provide the most bang for their buck. And for many people, the easiest way to make sure this happens is to move to a new state with a lower tax burden than their current one. If you're interested in learning more about relocation or retirement generally, please reach out to us at info@sunboundhomes.com or visit our services page to see all the ways in which Sunbound can help you have your easiest move yet.

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