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Migration Patterns within the United States
 

Migration Patterns within the United States

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Presented at NAR's Midyear Meeting Residential Real Estate Forum by Raven Molloy of the Federal Reserve Board of Governors

Presented at NAR's Midyear Meeting Residential Real Estate Forum by Raven Molloy of the Federal Reserve Board of Governors

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    Migration Patterns within the United States Migration Patterns within the United States Presentation Transcript

    • Migration Patterns within the United States Raven Molloy Federal Reserve Board of Governors Christopher L. Smith Federal Reserve Board of Governors Abigail Wozniak University of Notre Dame May 17, 2012The analysis and conclusions set forth are those of the authors and do not indicateconcurrence by other members of the research staff or the Board of Governors.
    • Motivation 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.
    • Outline 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.
    • Changes in migration over time Fraction of Population Who Moved in the Last 12 Months (Any Distance) .2 .18 .16 .14 .12 .1 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Source: Current Population Survey.
    • Changes in migration over time 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 Fraction of Population Who Moved Within County .14 .12 .1 .08 .06 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Source: Current Population Survey.
    • Changes in migration over time Fraction of Population Who Moved Across County, Within State .05 .04 .03 .02 .01 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Source: Current Population Survey.
    • Changes in migration over time Fraction of Population Who Moved Across States .05 .04 .03 .02 .01 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Source: Current Population Survey.
    • Changes in migration over time 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.
    • Migration by demographic/socioeconomic group Migration Across State by Age .06 .05 .04 .03 .02 .01 0 1980 1985 1990 1995 2000 2005 2010 Year age 0-17 age 18-24 age 25-34 age 35-44 age 45-64 age 65+ Source: Current Population Survey.
    • Migration by demographic/socioeconomic group Migration Across State by Homeownership .07 .06 .05 .04 .03 .02 .01 0 1980 1985 1990 1995 2000 2005 2010 Year Renters Homeowners Source: Current Population Survey.
    • Migration by demographic/socioeconomic group 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.
    • The role of underwater homeowners 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 .04 OK AR .02 Change in Migration Out of State DE NM UT CO NH NV IN AL TN GA HI MS FL MO 2006 to 2011 NE PANC 0 ME CA MI NY TX WV ND CT WI MA MN OHMDVA AZ NJ MT SCOR WA IL KS KY LA IA ID -.02 AK RI -.04 WY DC -.06 0 .05 .1 .15 .2 .25 .3 .35 .4 .45 .5 .55 .6 .65 .7 Fraction of Underwater Homeowners in 2009Q3 Source. Current Population Survey and CoreLogic.
    • The role of underwater homeowners Out-Migration from States with a High Share of Underwater Homeowners .05 .04 .03 .02 .01 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Year Arizona California Florida Michigan Nevada Source. Current Population Survey and CoreLogic.
    • The role 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).
    • Conclusions 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.