- With the rise of remote work, more Americans have the freedom to live where they want.
- Data from Freddie Mac shows an increasing share of people are relocating to areas more prone to natural disasters.
It wasn't only historically-low mortgage rates that encouraged millions of Americans to purchase homes during the pandemic, for many, the shift to remote work allowed them to seek out homes in areas that offer them greater affordability and better access to nature.
But as homebuyers migrated from densely packed cities to suburbs and exurbs, a new study from mortgage giant Freddie Mac warns that an ever-increasing number of Americans are exposing themselves to various natural hazards via their relocation. They highlight what are described as "high-risk" areas, or locations that are more vulnerable to droughts, wildfires and coastal floods, and earthquakes.
Freddie Mac's research suggests that net migration to these high-risk areas has doubled since the beginning of the pandemic as more people relocate to places with greater exposure to wildfires, droughts and hurricanes. However, the trend has also led to more Americans, particularly those in the West, leaving areas more prone to earthquakes.
The public-private behemoth analyzed nearly 30 million Freddie Mac loan applications for purchases of owner-occupied homes over a 22-year period and then combined that data with FEMA's National Risk Index, a dataset and online application that identifies communities most at risk to 18 natural hazards — including the previously mentioned.
"The COVID-19 pandemic exacerbated a shift in demographic migration," Freddie's researchers wrote, adding that the search for new housing has "pushed many Americans away from expensive coastal markets to parts of the country more exposed to various natural hazards."
The demise of the daily commute to the office has opened up a whole new world of possibilities for where and how Americans can live. As more US employees are given the option to work remotely, it's not surprising that many have chosen to move across the country. But as environmental factors linked with global warming lead to more natural disasters, migrating homebuyers may be putting themselves in harm's way — it could end up costing them in the long run.
"People may be unaware of these hazards when they move to an area, but they become obvious after disaster strikes," Freddie's researchers wrote, adding that "natural hazards span the United States, but certain neighborhoods are at higher risk than others."
Flordians are the most at risk to natural disasters
Indeed, certain US housing markets — particularly cities in Florida — are more vulnerable to natural disasters than others.
The state has experienced five federally-declared disasters since 2000 due to flooding, and has undergone severe housing damage from several large hurricanes and tropical storms.
Over the past two years, disaster relief needed for hurricanes Ida and Sally, as well as tropical storms like Claudette and Cristobal, have cost Florida's government, taxpayers, and insurance companies millions of dollars. It's even led to several large insurers like John's Insurance and Southern Fidelity pulling out of the state completely.
However, despite the environmental and financial risks associated with Florida, transplant home buyers continue to flock to the area for its relatively affordable housing market, low taxes and business-friendly ecosystem.
According to Florida's Office of Economic and Demographic Research, the home-buying hotspot grew by an estimated 329,717 new residents between April 2020 and April 2021. The organization anticipates that by April 2027, Florida's population will average 294,756 net new residents per year, averaging 808 each day.
This is especially alarming, considering that scientists and ecological experts project that in the next 20 years, rising sea levels and frequent storms are likely to increase environmental destruction in the state, as well as elevating its mortality risk — all of which EDR says could end up costing residents, both new and old, billions of dollars.
"More than any other US state, Florida is susceptible to damages from tropical storms, and climate change is projected to increase these risks," EDR's analysts said adding that "More severe storms not only pose risks to human lives and prosperity, they also reduce regional economic output over the short and long term."