Higher housing costs are cutting into the savings of people who leave New York for Florida and Texas.

Those earning at least $100,000 a year can still see significant savings when relocating to states with no income tax. But as more people make the move — fueling higher rent and home prices — the arbitrage on moving to Miami, Austin and Dallas has eroded since 2019, according to data analyzed by SmartAsset, a financial information provider.

New Yorkers who left for sunny Miami in 2023 saved almost 30% less than they would have if they moved in 2019. Meanwhile, those who left Manhattan for Dallas or Austin saved about 20% to 25% less if they moved last year compared to 2019.

And while Manhattan is still the most expensive place to live in the US, higher inflation rates in Miami, Dallas and Austin means costs in those popular destinations are catching up to New York, said Jaclyn DeJohn, the managing editor of economic analysis at SmartAsset.

“The inflation over the last few years has impacted Manhattan less than Miami, Dallas and Austin,” DeJohn said. “The real, or inflation-adjusted, purchasing power saved when moving from Manhattan to any of the three cities has actually decreased over the last four years, even after accounting for all the cost and tax differences.”

New York To Miami
In 2023, a move from NYC to Miami would save a person with a $100,000 salary an estimated $37,166 a year. In 2019, that number was around $51,273, according to SmartAsset. For those earning $250,000, the savings in 2023 were $88,036, compared to $122,956 in 2019.

Manhattan has long had a large cost of living premium when compared to the national average. But costs are rising more in Miami, which has seen a flood of new residents, jobs and investment over the past few years.

Housing, for example, is five times more expensive in New York City than the average. In Manhattan, rent increased by 3% and home prices jumped 30% from 2019 to 2023. That pales in comparison to the housing market in Miami, where home prices and rent jumped about 40% over the same time period. The cost of utilities and gasoline has also grown more in the Magic City compared to the Big Apple.

New York To Texas
Texas overtook the Sunshine State as the most popular place to move in the US in 2023 overall, according to the Census Bureau.

For New Yorkers considering a move, Austin remains the best deal when it comes to cost of living and taxes. Those moving last year with a salary of $100,000 still saved $49,285, down from $64,801 in 2019. Likewise, those earning $250,000 a year saved $108,208 by moving, down from $154,564 in 2019.

When it comes to housing, rent in Austin went up by 26%, and home prices jumped more than 50%. Early in the pandemic, Austin saw a tech-fueled boom as companies such as Tesla, Google and Apple started opening office in Austin, bringing their high-earning workers along with them. Now, the cost of groceries, utilities and transportation have gone up as well. 

Meanwhile, Dallas is a close second when it comes to saving power, though the offsets are less. New Yorkers making $250,000 saved $116,195 moving there in 2023, down from $135,887 in 2019. While utility bills have gone up by more than 50% in Dallas over that time, the construction boom in the city means both renters and buyers can find lower housing prices compared to the national average.

SmartAsset analyzed tax data from the Internal Revenue Service and the cost of living index from the Council for Community and Economic Research to determine how much workers saved when moving cities. The changes in purchasing power from 2019 to 2023 were adjusted for inflation in 2023 dollars.  

This article was provided by Bloomberg News.