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Presented at NAR's Midyear Meeting Residential Real Estate Forum by Raven Molloy of the Federal Reserve Board of Governors
Citation preview
Migration Patterns within the United States
The analysis and conclusions set forth are those of the authors and do not indicate concurrence by other members of the research staff or the Board of Governors.
Raven MolloyFederal Reserve Board of Governors
Christopher L. SmithFederal Reserve Board of Governors
Abigail WozniakUniversity of Notre Dame
May 17, 2012
Migration rates within the United States are currently at historically low levels.
Migration = a change of residence from one location in the U.S. to another.o Includes moves across states, across counties, or even across the
street.o Does not include moves into or out of the U.S.
Many have speculated that the housing market or economic recession may be responsible.
Homeowners who owe more on their mortgage than their house is worth may not be able to move.
Migration usually falls during economic recessions because job prospects are poor and fewer people form new households.
Motivation
Is the current low level of migration purely cyclical?
If so, we would expect migration to increase in the next few years as the job market improves, household formation picks up, and house prices rise.
But other factors may also play a role: Aging of the population: old people tend to move less than young
people, and older cohorts are becoming a larger share of the population.
Motivation
Goal of this research: to document patterns in migration over the past several decades.
Have certain types of migration (i.e. long-distance vs. short distance) fallen more than others?
Has migration for certain demographic or socioeconomic groups fallen more than others?
Has migration in certain locations fallen more than others?
Answering these questions can help shed light on the reason for low migration rates.
Why should REALTORs care? Many people who move buy and/or sell home. Migration of renters can also stimulate home purchases, such as
older couples who downsize after children move out.
Motivation
Examine changes in aggregate migration since 1980s.
Examine changes in migration for different demographic and socioeconomic groups.
Compare changes in migration in states with many underwater homeowners to other states.
Outline
Changes in migration over time
.1
.12
.14
.16
.18
.2F
ract
ion
of
pop
ula
tion
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010Year
(Any Distance)
Fraction of Population Who Moved in the Last 12 Months
Source: Current Population Survey.
Reasons for moving vary by distance of move: Short distance: Housing related, such as for a larger/better home,
to own rather than rent. Long distance: Job related, such as to start a new job or look for
work.
Changes in migration over time
Changes in migration over time
Source: Current Population Survey.
.06
.08
.1
.12
.14
Fra
ctio
n o
f p
opul
atio
n
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010Year
Fraction of Population Who Moved Within County
Changes in migration over time
Source: Current Population Survey.
0
.01
.02
.03
.04
.05F
ract
ion
of
pop
ula
tion
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010Year
Fraction of Population Who Moved Across County, Within State
Changes in migration over time
Source: Current Population Survey.
0
.01
.02
.03
.04
.05F
ract
ion
of
pop
ula
tion
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010Year
Fraction of Population Who Moved Across States
Aggregate migration has fallen since the 1980s.
Relatively steady trend over time. No unusually sharp drops coinciding with the housing market downturn or economic recession.
Declines are evident for all distances, but are proportionally larger for longer distances.
Within-county migration fell from 12 percent of the population to 9 percent, a decrease of 1/4.
Across state migration fell from 3 percent to 1½ percent, a decrease of 1/2.
Changes in migration over time
Migration by demographic/socioeconomic group
Source: Current Population Survey.
0
.01
.02
.03
.04
.05
.06F
ract
ion
of
age
gro
up
pop
ula
tion
1980 1985 1990 1995 2000 2005 2010Year
age 0-17 age 18-24 age 25-34
age 35-44 age 45-64 age 65+
Migration Across State by Age
Migration by demographic/socioeconomic group
Source: Current Population Survey.
0
.01
.02
.03
.04
.05
.06
.07F
ract
ion
of
gro
up p
opu
latio
n
1980 1985 1990 1995 2000 2005 2010Year
Renters Homeowners
Migration Across State by Homeownership
Migration across states has fallen for most groups: Age Homeownership status Race/ethnicity Nativity/citizenship Marital status Presence of children in household Education Income Employment status
The decline in migration is widespread across many different types of people.
Migration by demographic/socioeconomic group
The large drop in house prices has left many homeowners “underwater”, i.e. owing more on their mortgage than their house is worth.
Being underwater makes it more difficult to sell the house. The homeowner must either make up the difference between the
sales price and mortgage amount (plus pay the sales commission, taxes, etc.), or convince the bank to accept a short sale.
With more than 20 percent of all homeowners underwater, it seems reasonable to think that this channel has reduced migration.
If this were true, we would expect migration out of states with many underwater homeowners to have fallen more than other states.
The role of underwater homeowners
The role of underwater homeowners
Source. Current Population Survey and CoreLogic.
Cha
nge
in M
igra
tion
Out
of S
tate
2006
to 2
011
Fraction of Underwater Homeowners in 2009Q30 .05 .1 .15 .2 .25 .3 .35 .4 .45 .5 .55 .6 .65 .7
-.06
-.04
-.02
0
.02
.04
AL
AK
AZ
AR
CA
CO
CT
DE
DC
FLGA
HI
ID
IL
IN
IA
KSKY LA
ME MDMAMI
MN
MSMO
MT
NE
NVNH
NJ
NM
NY
NCND OH
OK
OR
PA
RI
SC
TN
TX
UT
VAWA
WV WI
WY
The role of underwater homeowners
Source. Current Population Survey and CoreLogic.
.01
.02
.03
.04
.05
Fra
ctio
n o
f Pop
ulat
ion
Mov
ing
Out
of S
tate
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Year
Arizona California FloridaMichigan Nevada
Out-Migration from States with a High Share of Underwater Homeowners
Migration out of states with more underwater homeowners has not fallen more than other states.
Why not? Gain from moving across states is very large. For example, many
people who migrate across states take a new job. Even if they can’t sell, underwater homeowners can rent their
property or default on their loan. The gain from moving must be large enough to overcome the cost.
Other research has found that local moves are lower in locations with many underwater homeowners (Ferriera, Gyourko and Tracy 2011).
The role of underwater homeowners
Migration within the United States has been trending down since the 1980s. No sharp decreases during the recession or housing market downturn.
Trends are downward for moves of all distances and most demographic and socioeconomic groups.
Downward trend in long-distance migration cannot be explained by underwater homeowners.
Conclusions
So why is migration falling?
There are no easy answers. This is an important topic for future research.
Conclusions