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🏁 COLD OPEN
Twice a year U-Haul publishes a list of the states people moved to, and everyone in real estate reprints it. The midyear list came out on July 29.
It is useful, and it is missing the thing that decides whether a rental works: whether the money moved too. The IRS tracks that, and almost nobody puts the two side by side.
When you do, they disagree. The disagreement is the whole read.
📊 MARKET PULSE - Week of August 18, 2026
Rates eased slightly. The 30-year fixed averaged 6.67%, down from 6.69% and up from 6.58% a year ago. The 15-year was 5.96%. That is a fifth straight week above 6.5% (Freddie Mac PMMS, August 13, 2026).
U-Haul's midyear map is out. Net one-way truck moves, July 2025 through June 2026: Boomers to South Carolina, North Carolina, Florida and Arizona. Gen Z to Texas, California, New York, Illinois and Colorado. Florida is the only state in the top ten for all four generations (U-Haul, July 29, 2026).
The IRS says the money went elsewhere. Florida gained $20.6 billion in adjusted gross income, Texas $5.5 billion, South Carolina $4.1 billion, North Carolina $3.9 billion, Tennessee $2.8 billion. California lost $11.9 billion, New York $9.9 billion, Illinois $6 billion (IRS Statistics of Income, tax years 2022 to 2023, released February 5, 2026).
Three of Gen Z's top five destinations are the three biggest income losers in the country. California, New York and Illinois shed $27.8 billion between them.
Four of the top five income-gaining states are Boomer top-ten destinations. The one exception is Texas.
Rents are still soft. National median rent is $1,388, down 1.1% year over year. Vacancy is 7.2%, off February's 7.3% peak but still above the 7% line (Apartment List, July 2026).
Tripwire check (the thresholds we told you we were watching):
Signal | Threshold | Now | Status |
|---|---|---|---|
30-year fixed | Sustained above 6.5% suppresses demand | 6.67% | Crossed, 5th week |
10-year Treasury | Above 4.5% pushes mortgages to 6.75%+ | 4.68% | Crossed |
Rate band | 6.25% to 6.75% through 2027 | 6.67% | Holding, near the top |
Rental vacancy | Above 7% means underwrite flat rents | 7.2% | Crossed |
What it signals: both datasets are honest and they measure different things. U-Haul counts trucks, fast and free, with no income attached. The IRS counts dollars, three years late. Trucks tell you who arrived. Dollars tell you what they arrived with, which is your rent roll and your exit.
🎯 THIS WEEK'S MOVE
Follow the Money, Not the Trucks
What's happening:
The generational split in this year's U-Haul data is unusually clean, and laying the income data over it is where it gets useful. Four of the five biggest income-gaining states are Boomer destinations. Three of Gen Z's top five are the three biggest income losers.
Translation:
Both groups are moving for good reasons, with very different balance sheets.
A Boomer arriving in South Carolina usually sold something first. They arrive with equity, they buy, and they are your exit. That is why the money lands where the trucks do.
A 24-year-old arriving in Chicago brings a job offer and a security deposit. They are your tenant, not your buyer, and what they can pay is capped by an entry-level salary. That is real demand. It is just demand for a $1,400 apartment, not a $2,800 house.
Neither is better. They are different businesses, and the mistake is buying one while underwriting the other.
Your play this week:
✅ Before you assume rent growth in any market, ask what the incoming household earns. If you cannot answer it from data, assume flat.
✅ Use the U-Haul list to generate candidates, never to justify an assumption. It is a "look here" signal, not a "pay more" signal.
✅ For buy and hold, weight the Boomer map. Those are the states where your future buyer arrives with cash.
✅ For rentals, weight the Gen Z map, then underwrite to what an entry-level wage supports, not to the metro median.
✅ Check whether your market gained or lost income, not just people. The IRS series is free and searchable by state. If the two datasets disagree, believe the money.
Why you care:
The investor who buys off the moving-truck list is buying population and hoping income follows. Sometimes it does. In California, New York and Illinois, $27.8 billion of it walked the other way while the trucks were arriving.
🔬 DEAL LAB
The 3% That Isn't There
Setup: A single-family rental at $285,000, renting for $2,800 a month. 25% down, so the loan is $213,750 at 7.0% over 30 years, and principal and interest come to $1,422. Taxes $370, insurance $150, management 8% of rent, maintenance reserve $150, vacancy underwritten at 7%.
Trap: Her model assumes 3% annual rent growth, because that is what the spreadsheet template came with and because she read that people are moving to her market.
Reality: Start with year one, which is fine either way.
Rent is $2,800. Multiply by 7% vacancy and you lose $196, leaving $2,604 in effective rent. Operating costs are $370 taxes, $150 insurance, $224 management and $150 maintenance, which totals $894. Subtract that from $2,604 and net operating income is $1,710.
Divide $1,710 by the $1,422 payment and DSCR is 1.20, exactly the line we underwrite to. Cash flow is $288 a month. A real deal.
Now run year five twice.
With 3% rent growth, rent reaches $3,151. Costs rise too, to about $1,006. Net operating income is $1,925 and cash flow is $503 a month. DSCR climbs to 1.35.
With flat rents, which is what the national data actually shows, rent is still $2,800. But costs still rose, to about $978. Net operating income is $1,626 and cash flow is $204 a month. DSCR falls to 1.14.
Five-year total cash flow | Amount |
|---|---|
Underwritten at 3% rent growth | $23,628 |
At flat rents | $14,796 |
Difference | $8,832 |
Read the DSCR line again. She bought at 1.20. Under flat rents she is at 1.14 by year five, below the standard she bought to, with nothing having gone wrong. No vacancy spike, no bad tenant, no repair. Just costs rising while rent did not.
Fix: Rent growth is the single most dangerous assumption in a rental model, because it compounds and nobody checks it afterward. National rents are down 1.1% and vacancy is 7.2%. Assume flat unless you can show income arriving in that specific market. The moving-truck list cannot show you that. The income data can.
📖 MICRO-GLOSSARY
Adjusted gross income (AGI): Income minus certain deductions, and what the IRS uses to track migration. A state "loses AGI" when the people who left earned more than the people who arrived.
Net migration: Arrivals minus departures. A state can gain people and lose income at once, which is what happened in California.
Rent growth assumption: The annual increase built into your model. At 3% it roughly doubles fifth-year cash flow versus flat, and almost nobody checks it afterward.
Vacancy rate: The share of rentals sitting empty. Above 7% nationally, landlords compete on price. That is why we underwrite flat rents past that line.
Exit buyer: Whoever buys the property from you. Not your tenant. Markets pulling equity-rich movers have a deeper pool of them.
Every term above, plus 35 more, lives on the Investor Glossary.
💡 BOTTOM LINE
U-Haul tells you where people went. The IRS tells you what they were earning when they got there. Most real estate content stops at the first one because it is free, fast, and makes a good map.
Population tells you there is demand. Income tells you what that demand can pay. You need both before you assume a single dollar of rent growth.
Not every property is worth your time. The edge is knowing which ones are.
The fuller version of this, how to build a lender stack before you need one and the pre-approval that holds up when a seller's agent calls to verify it, is written down in Fund the Deal First, attached at the end of the June 16 issue.
📚 SOURCES
Freddie Mac PMMS: 30-year fixed 6.67%, 15-year 5.96% (August 13, 2026)
U-Haul 2026 Midyear Migration Trends: net one-way moves by generation, July 2025 to June 2026 (released July 29, 2026)
IRS Statistics of Income, U.S. Population Migration Data: state AGI inflows and outflows, tax years 2022 to 2023 (released February 5, 2026)
Apartment List National Rent Report: median rent, year-over-year change, vacancy (July 2026)
Federal Reserve H.15: 10-year Treasury constant maturity (August 14, 2026)
Your customer messaged on Instagram. You never saw it.
Your customers reach out on the channels they already use — Instagram, Facebook Messenger, WhatsApp, SMS — and when no one's there to answer, they move on to a business that was.
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⚖️ COMPLIANCE
Educational only. Not financial, legal, or tax advice. Loan terms, rates, taxes, insurance, and rents vary by lender, property, and location. Verify all assumptions with qualified professionals before investing.
Until next time,
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