Zillow Research

Motivated to Move

The number of Americans moving in a given year is falling, and the reasons we choose to move are changing. But what is really “moving” these two needles in the first place?

Over the past two decades, we’ve seen a continual downward trend in the number of Americans moving to a new home. Between 1990 and 2000, the number of Americans aged 16 and over who had moved in the past year dropped 2.2 percent, according to the 1990 and 2000 March Supplements to the Current Population Survey. Since then, this trend has accelerated. In 2014, 26.9 million U.S. residents traded in the keys to their front door, down 14 percent from 2000.

There are many potential explanations for this long-term trend. Some experts blame an aging population. Indeed, older Americans do move less than younger residents. In 2013, only 5.3 percent of Americans between the ages of 45 and 86 moved, compared to 16.4 percent of those aged 16 to 45.[1] But while younger people move more often than older folks, they’re still not moving as often as they did in the past. The number of 16 to 45 year olds who have moved in a given year is down almost a quarter from the mid-1980s.

A more compelling argument revolves around the rise of service jobs and decline of tradable work as a share of total employment nationwide. During the heyday of U.S. manufacturing, chasing job opportunities in the auto industry, for example, meant moving to the relative handful of metros where cars were made. Metropolitan areas produced different things, and waxed and waned in their own time, pushing and pulling job-seeking populations across the country. Today, a growing number of jobs are in health care, education and services springing from within almost every American city, homogenizing the opportunities across metros and decreasing the need to pack up shop and move.

But it’s not just cross-state migration that’s down. The number of Americans moving to a new home within the county they already call home is down 7.2 percent since 1985.

So, what’s happening here?

No Longer Movin’ on Up

The reality is that the decline in geographic mobility is attributable to a number of factors. Zillow examined the primary reasons U.S. movers have given over time when asked why they chose to lock their old front door for the last time.

Today, just as in 2000, the most commonly cited reason for moving is for new or better housing – though to a lesser degree. The share of mobile Americans acting like the Jeffersons and movin’ on up peaked during the early 2000s, as the housing bubble began to inflate and housing optimism was high. But this motivation fell in prominence after the height of the bubble and the subsequent recession.

The second-most common reason cited for moving in 2000 was the desire to own a home, and not rent. But as the homeownership rate has declined, this moving motivation has fallen by half, and is now the sixth-most common reason cited for those moving in 2013. Between 2005 and 2014, essentially all of the growth in the number of households was driven by renters, a stark contrast to the previous decade.

What motivations have grown, then, demoting the desire to swap a lease for a deed? The fastest-growing reasons for moving include the need for more-affordable housing, wishes for a more manageable commute and the desire to establish one’s own household.

The effects of the housing recession are apparent in the share of Americans seeking cheaper housing. Many homeowners struggled to keep up with the mortgage after losing their job during the worst of the crisis. Some lucky homeowners were able to sell their home, but others fell into delinquency or were foreclosed upon. Either way, these residents would be in desperate need of cheaper housing.

Over the long-term, the growing share of mobile Americans in search of more affordable housing is reflected in the rising share of income required to rent a typical home. In virtually every major metropolitan area nationwide, stagnant incomes and ever-increasing rents have combined to cause serious affordability problems for our nation’s renters. For younger Americans, the simple act of establishing one’s own household – of moving out of the nest and making it on one’s own – has become a feat remarkable enough to list as the second-most cited reason for moving.

Whether the overall decline in geographic mobility is good or bad depends on the reason. If fewer households feel the need to move to a new area of the country because opportunities are more widespread and telecommuting is a viable option, then no harm, no foul. But if the decline is more driven by stagnating incomes and the rising cost of housing, and fewer households can find affordable options to which they can move, then that’s a much larger problem for the market.

 

[1] Zillow analysis of U.S. Census Bureau, Current Population Survey, March Supplement, 2014, made available by IPUMS-USA, University of Minnesota, www.ipums.org.

About the author

Skylar is the Chief Economist of Zillow.
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