This article examines the relationship between migration and transportation improvements. More precisely, will transportation improvements between central business districts (CBDs) and rural areas make migration trends more favorable in rural areas? Due to household utility geographical differentials, there are interregional migration. Thus, it is resaonable to believe that transportation improvements that increase the access of rural population to the labor and the service market of CBDs will influence interregional migration in rural areas positively. I will examine whether this is true for Iceland, a thinly populated area with two CBDs. A macro panel data set from Iceland will be used. It represents several essential varaibles of the house market for seventy-nine municipalities in Iceland during the period from 1986 to 2006. Furthermore, I will investigate whether there are any gender aspects regarding the matter.