Florida's fading appeal is a blessing for Alabama

It should be no surprise that a stagnant US housing market has slowed the flow of people moving to Florida and Texas. If home transactions are weak, it stands to reason migration will be too. What was surprising, and instructive, in recently released census data was the growing appeal of a handful of midsized states in the southeast.

Alabama, Tennessee and South Carolina all saw higher migration in the two years through June 2025 than in the two years prior to the COVID-19 pandemic, based on the latest update to population estimates from the Census Bureau. Florida and Texas experienced sharp declines, suggesting their problems are at least partly idiosyncratic.

Having two years of migration data since the market for resale houses ground to a halt allows us to understand what’s shifted since the pre-pandemic days and forecast what’s in store. Now that housing activity is finally picking up, it’s likely that states such as Alabama and South Carolina are going to be the big migration winners of the next cycle.

Florida and Texas’s relative loss of appeal - net domestic migration was the lowest in 20 years in the Lone Star state - makes sense. They were among the biggest beneficiaries of the pandemic-era surge in home prices that undid their reputation for affordability. Softening prices over the past few years have done little to reverse that. Add in big increases in home insurance costs, and it’s harder for middle class retirees in states such as Michigan or Ohio to consider moving to Florida as they once did.

Restrained migration is an economic anchor for states whose growth model relies on attracting people and jobs from pricey coastal regions and the Midwest. Florida and Texas combined added just 172,500 jobs in 2025, less than half of what they experienced through most of the 2010s. Florida’s unemployment rate increased by 0.9 percentage points in 2025; in Texas, it moved up 0.1 percentage point to a four-year high. The loss of economic opportunity along with affordability keep young families away, too.

The strong migration trends for Alabama, Tennessee and South Carolina are notable against this backdrop. On a per capita basis, more people moved to Alabama in 2025 than went to past favorites Florida, Texas or Arizona. And South Carolina is now the hottest state in the country for Americans looking for a change in scenery.

These states gained an affordability edge when Florida and Texas got more expensive. I wrote about Spartanburg, South Carolina, offering a lower cost of living and less congestion than nearby Atlanta. Similarly, Baldwin County, Alabama, offers the same pristine beaches with better affordability than some of the better-known destinations on Florida's panhandle. The National Association of Realtors noted that Alabama had two of the top four metros in the US for home price growth in 2025.

We’re seeing evidence of a pickup in housing activity in the rising levels of existing home sales and mortgage purchase applications. This sets the stage Alabama, Tennessee and South Carolina to outperformance. They aren’t as built out as some states and have economies that are less reliant on immigration. That's a strong position to be in for the next three years.

For homebuilders, it’s another signal to shift their focus to mid-sized metros in mid-sized states as they think about where to buy land for the future. It's also a reminder that the discourse around migration is more nuanced than it sometimes seems. It’s not just about New York versus Miami, or San Francisco versus Austin. Huntsville, Alabama, and Spartanburg are appealing to young families, and Myrtle Beach and Mobile are desirable retirement destinations. Bargain-hunting Americans are always on the lookout for a deal, no matter where it is.

This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Conor Sen is a Bloomberg Opinion columnist. He is founder of Peachtree Creek Investments.