As many Americans continue to struggle to find housing—whether due to high mortgage rates, high home prices and rents, or low inventory—some of the youngest and wealthiest homeowners and renters have made moves.
Affluent Gen Zers and millennials aged 26 to 35 relocate for better jobs and lifestyles, plus tax advantages that some states offer.
“They want to know how far their dollar will go,” Traci Wilson , a real estate agent with Engel & Völkers in Austin, Texas, told Fortune . “With rising inflation around the world, every penny matters. Can they build a lifestyle that continues to grow their business and quality of life? Can they see raising a family and being able to provide a life that will set them up for success? These are the questions young wealthy people are asking themselves as they decide where to lay down roots.”
A handful of states have a clear advantage for young professionals. Financial advisory SmartAsset used IRS data to analyze and rank the states where the most young people earning at least $200,000 per year move. Unsurprisingly, two of the states ranking at the top of the list—Florida and Texas—are those that have no state income tax, enticing more young people to move there.
“Texas summers can be unbearable, but the lack of state tax offers, among other things, the opportunity to afford a nice, well-appointed house with a luxury car or two in the driveway, good networking opportunities, year-round access to outdoor activities [and] sports, and a decent airport to whisk you off to the ski slopes in winter or Europe in the summer,” John Walkup, co-founder of real estate data analytics company UrbanDigs , told Fortune . “What's not to like?”
States are ranked based on the net number of households between the ages of 26 to 35 who moved that earned at least $200,000 in 2022.
The top 4 states where the young and rich are moving
1. Florida
Florida has long been a desirable location for retirees—both for its warm climate and tax breaks. But young people are moving there in droves, too. In 2022, 3,870 young and rich households moved to Florida, for a net gain of more than 1,700 households that year. The average adjusted gross income for these households was more than $526,000, seven times the median household income in the U.S. in 2022 .
“It’s no surprise that young wealthy buyers are drawn to Florida, particularly South Florida, as it has become an epicenter of luxury real estate, business and culture over the past few years,” Jaclyn Bild , a real estate broker associate with Douglas Elliman Real Estate , told Fortune . “Florida offers an attractive combination of high quality of life, economic opportunities, and a favorable tax structure.”
Plus, some of the most successful business leaders have made their move to Florida, which could have inspired aspiring executives to do the same. Jeff Bezos, the founder and former CEO of Amazon announced his move from Seattle to Miami in 2023. It was surprising at the time—until we learned how much he’d be saving in taxes thanks to Florida’s billionaire-friendly tax code. In April, Bezos purchased his third mansion for $90 million on South Florida’s Indian Creek Island, also known as Billionaire Bunker. Miami is also now known as “Wall Street South,” with Ken Griffin moving Citadel there and building a skyscraper.
“These high-profile endorsements have put Miami on the global radar, increasing interest from wealthy buyers,” Bild said. “And let's not forget the tax benefits. High-earners from New York or California are seeing their bank accounts grow just by changing their zip code.”
2. Texas
The Lone Star State has also seen a surge in wealthy Gen Zers and millennials moving there. In 2022, the state netted 1,660 households, also likely due to the lack of a state income tax.
“For Texas specifically, a lot of younger and rich people are moving because of the tax advantages,” Wilson said. “They see their dollar go a lot further than, let's say, a state like California. A $2 million dollar home in Texas would be comparable to a $5 million home in California.”
Indeed, California actually ranked quite low on the list, losing more than 3,000 young and rich households, according to the study. California home prices continue to spike amid a housing crisis for the state.
But young people are also attracted to big cities in Texas for the lifestyle appeal.
“Austin and Dallas are ‘18-hour cities,’ which millennials are drawn to for more space and access to amenities for a lower cost, a sense of community, and employment opportunities,” Wilson said. “They are also drawn to up-and-coming areas for the enhanced investment potential.”
3. Colorado
Colorado ranked No. 3 on SmartAsset’s list of where the most young and rich households are moving, netting 720 households in 2022.
The state has long been a magnet for people with active lifestyles who are drawn to Colorado's mountains and wide variety of outdoor activities.
More recently, home listings have started to increase in parts of Colorado, indicating a slowing real estate market that makes it easier for buyers and renters.
4. North Carolina
North Carolina has also seen gains in young and rich households. In 2022, the state netted 521 households that had an average adjusted gross income of $375,057, which is five times as much as the median household income in the U.S. in 2022.
A majority of migrants to North Carolina come from Florida, New York, Virginia, South Carolina, and California, according to a study by the University of North Carolina at Chapel Hill.
While North Carolina does have a state income tax, young people are attracted to the state for other reasons.
“People are moving to North Carolina because it’s such a diverse state,” Kay Church, U-Haul of West Charlotte president, said in a 2023 statement . “We have mountains and beaches, small towns and big cities. You name it, you can find it in North Carolina.”
This story was originally featured on Fortune.com
Local News
Comments / 0