Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

High Home Prices Are Making Americans More Reluctant to Move

ForexJun 28, 2019 23:16
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Bloomberg. A prospective home buyer enters a house for sale in Peoria, Illinois, U.S., on Thursday, May 30, 2019. The National Association of Realtors is scheduled to release existing homes sales figures on June 21.

(Bloomberg) -- Blame increasingly unaffordable housing in wealthier U.S. areas -- and relatively meager wages in less-affluent ones -- for the long-run decline in the share of Americans relocating around the country.

Exorbitant home prices have outweighed the benefit of bigger paychecks for households deciding whether to move to areas with greater job opportunities, while the allure of cheaper properties in less-prosperous regions has failed to make up for smaller salaries in those places, according to an International Monetary Fund working paper released this month.

“Increasing house price and income inequality” accounts for about two-thirds of the fall in long-distance migration between rich and poor U.S. areas in recent decades. Using Internal Revenue Service data, as well as figures from real-estate data provider Zillow Group Inc. and the U.S. Census Bureau, authors Tamim Bayoumi and Jelle Barkema tracked migration flows between areas of varying affluence, monitoring some 200,000 moves over 20 years between regions at least 200 miles apart.

About 72% of the decline in moves from poor to rich areas can be explained by regional house-price differentials, the authors found after controlling for other variables, with 66% of the drop in relocations from rich to poor attributable to rising income inequality.

Recent research has attributed the multi-decade decline in domestic migration rates to factors such as an aging U.S. population and the rise in national homeownership, with Americans less inclined to move as they get older or after taking on a mortgage.

Interstate migration declined to 1.5% in 2016 from 3% in 1981, according to Census data reviewed by the authors. The new figures highlight how regional inequalities and the emergence of so-called superstar cities have helped anchor many Americans in place, suggesting dwindling options for those chasing new opportunities or looking to downsize.

The decline in mobility also carries consequences for the labor market, the authors note, citing past instances of mass migration such as the California Gold Rush and the push north by African Americans after World War II. Those transitions increased productivity and output and fostered a more efficient allocation of labor.

“The United States’ status as the global poster child of dynamic labor mobility is waning,” the authors write, adding that a decrease in migration “reduces labor market churning, rendering downturns longer and recoveries slower.”

High Home Prices Are Making Americans More Reluctant to Move
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email