Exploring State-to-State Migration: A Driver for Construction Growth

State-to-state migration continues to be a dominant force shaping the U.S. economy, influencing housing markets, commercial real estate demand, labor dynamics and business investments. In 2023, an estimated 7.5 million Americans relocated across state lines, drawn by factors such as job opportunities, lower taxes, housing affordability and lifestyle preferences.

But where exactly is migration concentrated? And which states are seeing the biggest real estate booms as a result?

New research from StorageCafe on interstate moving activity reveals that migration to the South and West remains a powerful trend, as states in these regions benefit from lower living costs, growing job markets and business-friendly policies. Meanwhile, expensive coastal markets are experiencing negative net migration, suggesting the need for further streamlining and rethinking of their economic strategies.
 

Is Real Estate Development Keeping Pace With Migration?

Some of the biggest migration magnets — Texas, Florida and the Carolinas — are seeing a real estate surge as developers race to accommodate newcomers.

Texas added nearly 138,000 net new residents in 2023, surpassing Florida as the nation’s top migration destination. This steady influx is reshaping real estate markets, driving demand for both housing and commercial development. Many newcomers quickly transition to homeownership, with 37% of those who moved to Texas in 2023 purchasing homes within their first year — further intensifying the need for new housing.

To accommodate this rapid population growth, major Texas metros, including Houston, San Antonio, Austin and Dallas, are witnessing a surge in construction activity. Houston, for example, has permitted an average of 6,600 single-family homes and nearly 9,500 apartments annually since the start of the decade. Commercial real estate is expanding at a similar pace, with the city adding 9.3 million square feet of new industrial space, 1.7 million square feet of office space and over 516,000 square feet of self-storage space annually since 2020.

Florida remains a dominant player in domestic migration, growing by over 137,000 net newcomers in 2023. The state continues to attract residents from high-cost markets such as New York, Georgia, Texas, California and New Jersey. This influx is far from a short-term trend — net migration in Florida reached 238,000 in 2022 and 208,000 in 2021, demonstrating sustained demand for housing and commercial real estate. The growing population has fueled a construction boom in Jacksonville, Miami and Orlando, where developers are responding with large-scale residential and commercial projects. Jacksonville has emerged as a particularly active market, with an average of 5,400 single-family homes permitted annually, a remarkable figure for a city of its size.

The Carolinas and Georgia have also solidified their positions as migration hot spots. North Carolina added nearly 111,000 net new residents in 2023, marking over a decade of steady net migration growth. This surge has been reflected in the state’s real estate activity, and developers are ramping up construction to accommodate new arrivals. Since the start of this decade, Raleigh has permitted approximately 4,700 apartments annually and added 950,000 square feet of new office space each year, reflecting its expanding economic footprint.

Georgia has also climbed the ranks of migration-driven growth, adding 62,000 net residents in 2023, making it the fifth most popular destination for domestic migrants. Atlanta, the state’s economic engine, has seen a surge in housing demand, resulting in over 6,000 new apartments permitted annually since the beginning of the decade. The industrial sector in Atlanta has also boomed, with over 12 million square feet of industrial space delivered annually, largely driven by the region’s robust logistics and e-commerce industries.

Western Expansion: Real Estate Growth in Arizona, Colorado & Tennessee

Arizona, Colorado and Tennessee have remained consistent net migration gainers for nearly a decade. Arizona, in particular, has been a prime destination for those leaving California, adding 57,000 net newcomers in 2023. The state’s relatively lower housing costs and strong job market have fueled Phoenix’s rapid development. The city is among the nation’s most active real estate markets, averaging 4,400 single-family home permits and 8,600 multifamily permits annually since the start of the decade. In addition to housing, Phoenix is witnessing significant growth across industrial, office and self-storage real estate, reflecting its expanding economy.

Denver is also experiencing a real estate construction boom, with nearly 6,000 new apartments permitted annually since 2020. This surge aligns with the city’s strong job market and its appeal among young professionals seeking a high quality of life.

Meanwhile, Nashville has exceeded expectations for a city of its size, with an impressive 10,200 apartments permitted annually this decade. The city’s booming entertainment, health care and tech industries, combined with a relatively low cost of living, have spurred rapid housing development and strengthened its economic standing as a rising migration hub.

Self-Storage Growth Reflects Migration Patterns

As domestic migration intensifies, the self-storage industry has emerged as a key player in meeting the space demands of relocating Americans. The demand for storage has surged in parallel with population shifts, prompting substantial expansion in this sector.

Texas and Florida have seen some of the most significant self-storage growth, with both states exceeding the national benchmark of 7 square feet per capita. Texas has 11 square feet per capita, while Florida stands at 9.3 square feet per capita. Over the past five years, Texas has added nearly 31 million square feet of new self-storage space, representing a 12% increase in its total inventory. Florida has seen even stronger growth, delivering 33.5 million square feet of new storage space, accounting for a 19% expansion.

This steady pace of new construction has helped keep rental prices affordable. In Texas, the average monthly rent for a storage unit is $117, while in Florida, it sits at $139 per month. The pipeline of construction is helping to keep prices in check, ensuring that self storage remains an accessible option.

The West is also experiencing a surge in self-storage construction, with Phoenix leading the way. The Arizona capital has been adding nearly 600,000 square feet of new storage space annually in response to its high migration rates. Other high-growth cities, such as San Antonio, Jacksonville and Charlotte, have also seen substantial increases in self-storage supply, reinforcing its role as an essential real estate sector in fast-growing regions.

Looking Ahead: Migration’s Lasting Impact on Real Estate

With migration trends showing no signs of slowing, the South and West are expected to remain dominant destinations, continuing to drive economic growth and real estate expansion. Meanwhile, states losing residents will need to rethink their housing markets, business environments and economic policies to counteract population declines.

For developers and investors, closely monitoring migration trends will be key to identifying emerging opportunities and mitigating risks. Housing, commercial real estate and self-storage will remain integral sectors in shaping the evolving real estate landscape, with migration serving as a guiding force for future development strategies.

As the nation continues to shift, real estate markets must remain adaptable — ensuring that infrastructure, housing supply and commercial space align with the ever-changing movement of people across the U.S.