After a disaster, it is common to equate repopulation and rebuilding with recovery. Numerous studies link post-disaster relocation to adverse social, economic, and health outcomes. However, there is a need to reconsider these relationships in light of accelerating climate change and associated social and policy shifts in the USA, including the rising cost of flood insurance, the challenge of obtaining aid to rebuild, and growing interest in “managed retreat” from places at greatest risk. This article presents data from a survey of individuals who opted either to rebuild in place or relocate with the help of a voluntary home buyout after Hurricane Sandy. Findings show those who lived in buyout-eligible areas and relocated were significantly less likely to report worsened stress than those who rebuilt in place. This suggests access to a government-supported voluntary relocation option may, under certain circumstances, lessen the negative mental health consequences associated with disaster-related housing damage.