Yet despite a market full of reluctant buyers, sellers are not under pressure to drop their prices. Almost 60 percent of households have an interest rate below 4 percent, according to a study published in the Journal of Finance; selling would mean trading that low rate for a much higher one on a new purchase. Not since the 1980s, when borrowing rates soared into the double digits, have so many Americans been locked into their mortgages, said Lu Liu, an assistant professor of finance at the Wharton School at the University of Pennsylvania, and an author of the study, describing the conditions as “unprecedented.”
The implication of the argument above is that people do not want to leave a low mortgage rate for a higher mortgage rate. But this is not necessarily a new situation; mortgages rates go through cycles. Is this just about mortgage rates or do low mortgage rates make it easier to not move due to other reasons? American geographic mobility is low.
Presumably, many people have a price or conditions under which they would move even with a low mortgage. What exactly would it take: a new job that offers 10% or more compensation? An unbelievable housing deal elsewhere? A perception that where they are does not have a good future?
Imagine this scenario: mortgage rates slowly decrease in the next year or two, getting back to 3-5%. Would this significantly increase mobility? It could put more homes on the market as homeowners might be more willing to see what they could get. But would this significantly change the calculus of moving in the first place?
My suspicion is that this is a bigger issue that just mortgage rates. With higher rates, some people will still move: those with resources and opportunities they feel they cannot pass up. With lower rates, more people will feel they could move. But geographic mobility is already low compared to the postwar years and it could take a lot more than mortgages to change this.
But over the past 50 years, this engine of American opportunity has stopped working. Americans have become less likely to move from one state to another, or to move within a state, or even to switch residences within a city. In the 1960s, about one out of every five Americans moved in any given year—down from one in three in the 19th century, but a frenetic rate nonetheless. In 2023, however, only one in 13 Americans moved.
The sharp decline in geographic mobility is the single most important social change of the past half century, although other shifts have attracted far more attention. In that same span, fewer Americans have started new businesses, and fewer Americans have switched jobs—from 1985 to 2014, the share of people who became entrepreneurs fell by half. More Americans are ending up worse off than their parents—in 1970, about eight out of every 10 young adults could expect to earn more than their parents; by the turn of the century, that was true of only half of young adults. Church membership is down by about a third since 1970, as is the share of Americans who socialize several times a week. Membership in any kind of group is down by half. The birth rate keeps falling. And although half of Americans used to think most people could be trusted, today only a third think the same…
As a result, many Americans are stranded in communities with flat or declining prospects, and lack the practical ability to move across the tracks, the state, or the country—to choose where they want to live. Those who do move are typically heading not to the places where opportunities are abundant, but to those where housing is cheap. Only the affluent and well educated are exempt from this situation; the freedom to choose one’s city or community has become a privilege of class.
A possible solution?
These three principles—consistency, tolerance, and abundance—can help restore American mobility. Federal guidelines can make the environment more amenable, but the solutions by and large cannot come from central planning; states and cities and towns will need to reform their rules and processes to allow the housing supply to grow where people want to build. The goal of policy makers, in any case, shouldn’t be to move Americans to any particular place, or to any particular style of living. They should instead aim to make it easier for Americans to move wherever they would like—to make it equally easy to build wherever Americans’ hopes and desires alight.
We will likely never be at a point where everyone will move to pursue certain opportunities – see an earlier post here – but this trend over time does go against earlier patterns. If more people were able to move, they might then be able to take advantage of housing or job opportunities.
One thing I have not seen in articles that highlight this: do more people want to move but can’t (which could be linked to social class)? Take some patterns from recent years. If more employers allowed work from home, would this free up people to move? If people perceive there to be more opportunities in the Sun Belt, how many move there (hence growing populations in recent decades) versus those who cannot?
Or, what if more people are used to not moving now and would stay put even if there were opportunities elsewhere? The era of mass mobility may be over and new generations are less used moving. Perhaps they want to stay closer to family or like staying rooted in one place.
Maybe the hyper mobility of Americans in the 19th and part of the 20th centuries was abnormal. Before then, opportunities were more restricted and people had stronger ties to families and communities. Why should humans move so frequently?
Looking forward, does easy access to social media and the Internet make it even easier to not move? People can access the connections and opportunities they want from wherever they are, as long as they have a fast connection.
In fact, analysis by the Census Bureau and Harvard University earlier this year found that 80% of young adults now live less than 100 miles from where they grew up.
This statistic could be parsed a few different ways. This includes
-This percentage would include the significant numbers that are living at home with family.
-One hundred miles is not a small distance. This would cover almost all of the largest metropolitan regions. This probably puts people within a two hour distance of home. It does mean that someone could live in a very different setting and still be close to home.
-What does this number mean in the long run? How does it compare to other years and eras? If Americans move less frequently, does that mean they also do not move as far? There is a narrative in the United States that people strike out on their own for new, usually economic, opportunities. Does this data fit that?
“This idea of ‘red state versus blue state’ misses a great deal of heterogeneity within states, as well as clusters and spatial patterns that occur within states,” said Ryan Strickler, a political scientist at Colorado State University, Pueblo. “Instead, we’re seeing more of a micro level of political sorting.” …
[E]xperts say the more significant phenomenon is people moving within the same state where they can find others who are politically like-minded. These migrations aren’t about specific political outcomes like the Dobbs decision. Instead, they’re linked to social polarization. “There’s a lot of local reshuffling,” said Alexander Bendeck, a Ph.D. student in the Georgia Institute of Technology’s School of Interactive Computing.
In one of his current projects, Bendeck explores U.S. relocation patterns in the 2010s, using population migration data from the IRS to track the number of migrants between counties nationwide. Bendeck recognized the shift in migration from the coasts to the South or Midwest but also emphasized the effects of moving within metropolitan areas. Many natives of major Southern cities have moved out to the suburbs or to smaller cities. And the locals of those suburbs or cities move to more rural areas or even smaller cities.
But there’s a huge caveat to any migration data: It is impossible to attribute all instances of relocation, even within the same state, to politics. In fact, politics has not been a major factor why most Americans have moved in recent history, Strickler said. Instead, migration is more financially driven, whether people are seeking out a lower cost of living, better job prospects or proximity to family.
I would be very interested in seeing more data on this micro-sorting within region. As noted in this piece, regions are often broken up this way: denser cities at the core vote more Democratic, far-flung suburbs vote more Republican, and in-between suburbs are more mixed. When people move within a region, how often do they end up in a community that aligns with their political sensibilities compared to their previous home?
One way to interpret this is that people are more tied to finances, jobs, and family within local places or geographies than to politics. Another way to put this is that Americans may express concerns about political trends, but they can often find more agreeable conditions not too far from where they currently live.
This highlights the importance of local government and politics even as there is a lot of attention paid to national politics. Even as state or national patterns may not be what individuals desire, they can rest assured that local communities or representatives share their positions. This could be related to the pattern where more Americans approve of their local Congressional representative than they approve of Congress as a whole.
“She said, ‘Where will I go?’ How do you start your life again when you’ve lived your whole life in one house?” Kristie Purner said.
What I found interesting in this comment is comparing it to the more regular mobility of Americans in the suburban era. The US government has tracked this since 1947. For several decades after World War Two, the percent of Americans who moved each year hovered around 20%. During mass suburbanization and relatively prosperity, more people moved regularly. Many metropolitan regions, including the Chicago area, boomed during this time. Some of this suburbanization and prosperity was present before the Great Depression as well.
Given all of this, how many Americans can say they lived same place for decades? How many suburbanites stayed in one home? My guess is that it is a relatively small number of people.
Perhaps this might change in the coming decades with decreased levels of mobility among Americans. At the same time, it is hard to imagine a suburbia that is marked by permanence rather than continued growth and change.
Home prices and incomes vary widely, and there are oases of affordability, mainly in the Rust Belt and Midwest. The top five most affordable places among metro areas with population of 500,000 or more:
Lansing, Michigan: As a result of modest home prices, 90.6 percent of all new and existing homes sold in the fall months were affordable to families earning the area’s median income of $79,100. The median home price was $155,000 in the fourth quarter of 2021, the builders’ index says.
Scranton-Wilkes Barre-Hazleton, Pennsylvania: Wages here are below national levels, but so are home prices — the median sale price was $150,000 in the fourth quarter. As a result of rock-bottom prices, 88.5 percent of all new and existing homes sold in October, November and December of 2021 were affordable to families earning the area’s median income of $70,600.
Pittsburgh: This metro area has a median family income of $84,800 and a median home price of just $166,000. As a result, 88.4 percent of homes were affordable for typical earners.
Indianapolis. This metro area has a median family income of $81,600 and a median home price of $215,000. As a result, 87.6 percent of homes were affordable for typical earners.
Akron, Ohio: With a median family income of $83,300 and a median home price of $165,000, fully 86.5 percent of homes were in reach of median-income families in the state capital.
Two features quickly stand out: the homes in these regions really are cheap (particularly when compared to local earnings) and they are all in the Midwest/Rust Belt.
Still, I have seen some version of this list many times now and I am not sure what to make of them. Why aren’t people moving to these locations?
The most obvious answers to me: it is not necessarily easy to move and these cities are perceived to have a lack of opportunities (economic, cultural, housing, etc.). American geographic mobility as a whole is down but do people actually move just for cheaper housing? What this list does is highlights that median income families can access median level housing in these five places. Get a decent job and owning a house is possible.
There are other possible answers that get more complicated:
People just do not think of the Midwest/Rust Belt when thinking of places to live. Lack of opportunities, the weather, the middle of the country, a Midwestern blah-ness, etc.
It is not just about a lack of opportunity; these are places seen as on the decline. Even if they are cheaper, who wants to live in a place that has already seen its best days when “growth is good” is a key marker of communities?
In sum: some American metropolitan areas are much cheaper than others, they have common characteristics, and there are a number of compelling reasons why people do not move to the places with cheaper housing.
Whether it’s Boise, Idaho, or Reno, Nevada, or Portland, Oregon, or Austin, Texas, the American housing market is caught in a vicious cycle of broken expectations that operates like a food chain: The sharks flee New York and Los Angeles and gobble up the housing in Austin and Portland, whose priced-out homebuyers swim to the cheaper feeding grounds of places like Spokane. The cycle brings bitterness and “Don’t Move Here” bumper stickers — and in Spokane it has been supercharged during the pandemic and companies’ shift to remote work.
No matter how many times it happens, no matter how many cities and states try to blunt it with recommendations to build more housing and provide subsidies for those who can’t afford the new stuff, no matter how many zoning battles are fought or homeless camps lamented, no next city, as of yet, seems better prepared than the last one was…
All of this happened fairly recently. In the years after the Great Recession, when homebuilders were in bankruptcy or hibernation, migration to the Spokane area plunged. That pattern shifted in 2014 when, as if a switch had been flipped, waves of migrants started arriving as already high-cost cities like Seattle and San Francisco saw their housing markets go into a tech-fueled frenzy…
Five years ago, a little over half the homes in the Spokane area sold for less than $200,000, and about 70% of its employed population could afford to buy a home, according to a recent report commissioned by the Spokane Association of Realtors. Now fewer than 5% of homes — a few dozen a month — sell for less than $200,000, and less than 15% of the area’s employed population can afford a home. A recent survey by Redfin, the real estate brokerage, showed that homebuyers moving to Spokane in 2021 had a budget 23% higher than what locals had…
Last year, Woodward declared a housing emergency, and her administration has put in place initiatives that mirror those of housing-troubled cities on the West Coast. The city has built new shelters, is encouraging developers to repurpose commercial buildings into apartments, is making it easier for residents to build backyard units, and is rezoning the city to allow duplexes and other multiunit buildings in single-family neighborhoods.
The primary focus here is on housing and the increase in prices. From what is described above, a good number of long-time residents now struggle to find decent housing. This is indeed a problem to consider.
I would guess there are other changes as well: increased business activity, more traffic, newcomers operating in local civic organizations and institutions. Many of these changes are assumed to be good in most communities: growth means status, activity, and increased tax revenues. Sure, there are some externalities – sprawl and what comes with it, changes to how things have been – but these are often viewed as growing pains. Growth is good.
The implication in this story is that this could happen to any community: people from the outside discover an undiscovered location and their moves drive up housing costs. Yet, I wonder how true this is. Will people in overheated housing markets really go anywhere or only to certain locations? Spokane is within a particular region plus has its own features and its own history. Would people from the coasts end up in Youngstown, Ohio or Fargo, North Dakota, Jackson, Mississippi, or Detroit, Michigan where there is plenty of cheaper housing and distinct local character? The housing game may not just be an endless one where those with resources are always searching out the next cheaper market; there are limits to where people go and invest their resources.
Targeted incentive programs – described here – might help with this issue as communities seek out particular kinds of residents they would like. If those programs turned into floods of people, how many would really want to turn that down?
Residents have been fleeing states like California with high taxes, expensive real estate and school mask mandates and heading to conservative strongholds like Idaho, Tennessee and Texas.
More than one of every 10 people moving to Texas during the pandemic was from California, according to the Texas Real Estate Research Center at Texas A&M University. Most came from Southern California. Florida was the second biggest contributor of new Texans…
Political scientist Larry Sabato posted an analysis on Thursday that shows how America’s “super landslide” counties have grown over time.
Of the nation’s total 3,143 counties, the number of super landslide counties — where a presidential candidate won at least 80% of the vote — has jumped from 6% in 2004 to 22% in 2020…
Bishop’s book explains how Americans sorted themselves by politics, geography, lifestyle and economics over the preceding three decades. Sitting in a Central Texas café, Bishop says that trend has only intensified in the 14 years since the book’s publication.
I have read a lot of similar stories in recent years. All of this data, at face value, seems to make some sense: population flows from one set of states to another, the concentration of politically similar people in certain locations, and an ongoing sorting by politics.
At the same time, I am not completely convinced that it is politics driving moves. How often does a person, family, or business move solely because of politics or politics is the clear #1 reason? Politics might factor in an ultimate decision but I suspect jobs, retirement, and the locations of family are more often prime movers and/or large factors. Plus, the organization or sorting or residents has been going on for decades due to race/ethnicity (see the example of the suburbs) and social class (again, the suburbs). And could we consider how political patterns are related to race and class?
We can always find at least a few people who will describe moves undertaken to be closer to their political allies. I am not sure we are at the point where many are moving primarily or solely because of politics.
Car sharing services. There are more of these around today. Cut out the middle-man business and just deal with a private car owner for your transportation.
Taxis and/or ride share companies. These are more available in some places than others and do not allow the same freedom as being able to drive a rental car wherever and whenever you would like.
Public transportation. Even less available outside of denser urban areas. And even in places where mass transit is plentiful, many people still opt for private vehicles.
Walking or bicycling. Very difficult and possibly dangerous in many locations.
Borrowing a car from family or friends or doing without it for a time. It could be done but the location and time frame is very important.
Thinking back, I can recall multiple trips where a rental car was a necessity in order to get where we wanted to go. At the same time, some work trips did not require a vehicle because the location of the meeting was in a large city with public transit options. And if you are in a suburban or more rural setting and your car is in the shop for more than a day, a car rental may be very necessary.
Fifty-three communities in 24 states and Puerto Rico are trying to lure new residents by offering cash, covering moving costs or providing other incentives, according to makemymove.com, an online directory of such programs. They largely seek remote workers from expensive coastal areas. Though the idea started before the pandemic, COVID-19 fed the movement by quintupling the number of remote workers and dampening some of the conviviality millennials sought in big cities.
So far, many areas have failed to bring in significant numbers of remote workers despite offering incentives. Most don’t have the staff and money backing the Tulsa Remote program, which is funded by the George Kaiser Family Foundation.
Even so, smaller areas have found advantages in remote worker programs. Natchez, Mississippi, a river town north of New Orleans where the population has been declining for decades, saw home sales double to 700 in the past year, even though only 12 people have used a $6,000 incentive for remote workers, said Chandler Russ, executive director of Natchez, Inc. Economic Development, which operates the Shift South remote worker incentive plan…
Tulsa’s program is often cited as a rare success story. It moved 100 people in its first year, 2019, and despite the pandemic it projects another 950 moves this year. Along with cash incentives up to $10,000 for living in Tulsa at least a year, the program offers a free trip to check out the area and intensive social networking in person and online…
A new study by the Economic Innovation Group, a Washington, D.C.-based research organization, found the new workers created almost $14 in new local labor income — a measure of earnings by employees and business owners — for every dollar spent on relocating workers, adding $62 million in earnings by the workers themselves and the jobs created to support them in 2021.
It sounds like more data and time is needed to figure out whether the incentives lead to increased populations and, if they do, how and/or at what cost or benefit.
But, I could imagine many communities and their leaders would be interested in offering such incentives even if the data suggests they do not do much. Why? It is an actionable step that sounds like it should work. The community can lead with the incentive in their marketing. If people or businesses are looking to move, wouldn’t an incentive help encourage a particular decision? At the least, such an effort would get the name of the community out in front of the public or other interested parties.
Some of the other tidbits from the article cited above are interesting. Incentives could target particular kinds of residents or businesses. Increased housing costs could make an incentive worth very little. Could we imagine a future where potential residents negotiate with several communities in order to get a better deal? Just as businesses negotiate for tax breaks and communities compete with each other, why not residents?
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