Many older Americans are packing their bags and heading to states where it costs less to live. The main reason? The growing bills they have to pay for owning a home, especially property taxes.
Why Does It Matter?
Since 2019, property taxes have been rising in cities across the United States, making life more expensive for homeowners and those who dream of buying a house.
A recent study shows that property taxes are about 30 percent higher than they were before the pandemic. This increase is even though the average tax rate has actually decreased a bit because house prices have gone up much more.
For seniors, who often live on a fixed amount of money each month, increasing property taxes can be stressful and eat into their savings. This is why where they choose to live during retirement is changing.
What's Happening?
Experts at John Burns Research & Consulting studied where property taxes are the highest and how that connects with where people over 65 are moving.
They found that on the East Coast and in some Midwest states, homeowners pay some of the highest taxes—up to 2 percent or more of their home's value every year. But in other states, especially down South and out West, taxes are often much lower.
They then looked at how these tax rates affect retirement moves. The verdict? States with lower taxes are seeing more seniors moving in. For instance, very few retirees are moving into places like New York, New Jersey, and Illinois because of high taxes.
On the other hand, states like Nevada, Delaware, and Arizona, which are kinder to the wallet, have welcomed more than twice as many seniors from other states.
Staying Close to Home, But Not Too Close
Interestingly, many retired folks try to stay relatively close to their original homes when they move. East Coasters will likely move to another state on the East Coast, and the same pattern applies to the West Coast.
Nevada, for example, has seen a significant number of seniors come in from California, while Delaware has welcomed many from New Jersey, Maryland, or Pennsylvania.
Why Are Retirees Moving?
Simply put, money matters. High property taxes mean retirees have to spend more of their budget on their homes. Since seniors tend to live in larger, more valuable houses, they feel the pressure of property taxes more than younger families might.
Plus, they're less impacted by other types of taxes, like sales tax or income tax, so property taxes play a big part in their decision to move.
Research confirms this trend: in 2023, a third of seniors who moved out of state did so for housing-related reasons, often to be closer to family members or to find a more affordable place to live. This could be because high costs are also driving their kids and grandkids to cheaper locations.
However, this mass move of retired people to more affordable areas could create a challenge. As more people look to buy homes in these locations, it could push house prices up and make it harder for everyone to find affordable homes.
Read more: Home Buying Budget in 2025: A Guide to Affordability and Mortgage Options
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