By Austin Herrick
In a previous blog post, I considered how wage changes are related to the decision to move and the decline in household movement observed in the last two decades (see Figure 1 below). However, wage changes aren’t the only reason households choose to move. Changing motivations for moving are illustrative in examining the broader context of internal migration.
Source: Current Population Survey (1994 – 2018)
We examined the list of reasons given for moving in the Current Population Survey (CPS). We combined that list into several broad categories.
- Housing Related: want better house, want to own house, cheaper housing and other housing reason.
- Family Related: establish own household, married/divorced and other family reason.
- Work Related: new job/transfer, commute, look for work/lost job, retired and other job related.
- Other: includes all other reasons.
Figure 2 shows two significant findings about the motivations for moving.
- Housing-related reasons rank consistently as the largest motivation for moving.
- A significant decline in moving for housing began in 2004. Thus, the overall decline in movement during this period is largely attributable to the decline in moving for housing.1
Source: Current Population Survey (1994 – 2018)
While demographics do affect the motivations of movers, the importance of housing-related reasons, and their decline starting in 2004, is consistent. For example, housing is the most important reason for movement across levels of education,2 household size and age.
To inspect why the mid to late 2000s saw decreasing numbers of people moving for housing, Figure 3 decomposes these movers into more specific reason groups. Here, we see that the decrease is driven by fewer families moving in order to own homes or obtain better housing. Interestingly, this decrease begins in 2004, years before the extreme housing market volatility associated with the Great Recession. Housing prices peaked in the first quarter of 2006, median sales price peaked in the first quarter of 2007, and the Great Recession began in December of 2007.
Source: Current Population Survey (1994 – 2018)
These data present a puzzle--if movers’ motivation for better housing began declining in 2004, why did home sales prices and property values continue to increase? A possible answer is provided by Robinson & Todd (2010),3 who examine the role of non-owner-occupied housing in the run up to the housing crisis. They find that real estate as a speculative asset was increasingly becoming the domain of wealthier investors, either because property values priced out potential buyers or because investors were more frequently buying several homes.4
On the other hand, market realities do seem to explain the motivation of moving to obtain cheaper housing. This motivation increased sharply in frequency following 2006 (see Figure 3) and continued increasing into the financial crisis, significantly outpacing the desire to own a home. As the economy recovered from the recession, reasons for moving stabilized. By 2017, the desire to own a home recovered somewhat, almost matching the frequency with which respondents seek cheaper housing.
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Figures 2 - 3 display the percent of movers giving a particular reason for moving--slight increases imply only a relative increase in migrants, which would be true if the absolute value of migrants were still constant (because overall migration was decreasing throughout the observed period). ↩
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As an illustration, the figures below compare the reasons for movement given by college graduates vs non-college graduates. We can see that the frequency of work-related explanations for movement is significantly higher for college-educated movers (this finding matches the insight that the movement wage premium is significantly higher for these workers, as explained here), while non-college-educated movers are more likely to report family-related reasons.
Frequency of Movement by Reason: Non-College Grads
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Frequency of Movement by Reason: College Grads
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↩
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Robinson, B. L., & Todd, R. M. (2010). The Role of Non-Owner-Occupied Homes in the Current Housing and Foreclosure Cycle. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2189551 ↩
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From 2004 to 2007, the income of non-occupant home purchasers rose by 25 percent (from $100,000 to $125,000), as compared to 8.3 percent of occupants (from $60,000 to $65,000). Purchasing by non-occupants also accounted for a full 75 percent of the growth in sales in the final two years (2004-2005) of the housing boom, precisely the time when migrants’ interest in owning better homes fell off. These non-occupant owners, despite better credit profiles, had foreclosure rates slightly higher than owner-occupants (because the economic and non-economic costs of foreclosure were far lower), likely contributing to the volatility associated with the collapse of the housing market. ↩
,Percent of Individuals who Moved Last Year 2000,15.830005 2001,14.269217 2002,14.574168 2003,14.021884 2004,13.561279 2005,13.699241 2006,13.557565 2007,13.03168 2008,11.757351 2009,12.307371 2010,12.305884 2011,11.429523 2012,11.815097 2013,11.54489 2014,11.239365 2015,11.48887 2016,11.019525 2017,10.894325
,Housing-Related,Family-Related,Work-Related,Other 2000,45.399968,26.61925,17.21242,10.768361 2001,44.281465,27.059036,17.401362,11.258137 2002,45.589635,25.753193,17.998575,10.658598 2003,47.510608,26.307981,15.579134,10.602277 2004,48.08461,24.277182,16.989156,10.649052 2005,43.125406,27.154594,17.643338,12.076663 2006,41.757534,27.676049,18.394693,12.171723 2007,36.463434,30.142088,20.838371,12.556107 2008,35.035345,30.535513,20.904154,13.524989 2009,40.840558,26.339783,17.933184,14.886474 2010,39.58503,30.243772,16.420599,13.750598 2011,39.935075,27.847721,18.329006,13.888197 2012,43.90206,29.30374,19.340835,7.453365 2013,42.975717,30.266027,19.428956,7.329301 2014,43.053429,29.412365,21.46892,6.065286 2015,42.452844,31.077786,20.568116,5.901254 2016,38.199637,27.449616,20.1689,14.181847 2017,39.172283,27.900957,18.470581,14.456179 2018,38.198048,28.098883,19.686339,14.016729
,Wanted better house,Wanted to own house,Cheaper housing 2000,17.769502,11.043856,5.341522 2001,17.852985,10.41097,5.321505 2002,18.789291,10.543322,5.849545 2003,19.809676,10.170096,6.540754 2004,21.15575,9.298343,7.361726 2005,17.777616,9.285715,6.638088 2006,17.797439,8.572452,6.153658 2007,15.75911,5.925773,7.984548 2008,13.837825,5.782169,8.166271 2009,14.518257,5.47464,11.118118 2010,15.415943,4.606452,10.83314 2011,16.240201,4.40593,10.548687 2012,15.9226,4.688254,8.934359 2013,14.844708,5.843273,8.321372 2014,15.465298,5.639593,9.279753 2015,15.326698,5.262664,7.458388 2016,17.433271,5.906371,8.169811 2017,15.975119,7.318561,8.295413 2018,16.382965,7.264509,7.886697
,Housing-Related,Family-Related,Work-Related,Other 2000,46.254024,27.854764,15.145633,10.745579 2001,45.084116,28.794878,15.291821,10.829186 2002,46.462861,27.303587,15.764476,10.469077 2003,48.247086,27.459558,13.861661,10.431695 2004,49.172641,25.238726,14.930241,10.658393 2005,43.688066,28.655256,15.541384,12.115293 2006,42.510896,28.970857,16.411147,12.107101 2007,36.924227,31.644542,18.578637,12.852594 2008,35.989853,31.984431,18.599368,13.426348 2009,42.083758,27.541025,15.393047,14.982171 2010,40.739277,31.620687,14.286518,13.353519 2011,41.242876,28.93783,16.318864,13.50043 2012,45.129843,30.709799,16.484783,7.675575 2013,44.016376,31.85281,16.54956,7.581254 2014,43.819546,30.944017,18.980831,6.255606 2015,43.676722,32.722585,17.554642,6.046051 2016,40.224238,28.470088,17.219164,14.086511 2017,39.927029,29.391246,16.06632,14.615405 2018,38.883022,30.024028,16.765826,14.327124
,Housing-Related,Family-Related,Work-Related,Other 2000,41.282387,20.662578,27.176837,10.878198 2001,40.699662,19.3129,26.815121,13.172316 2002,41.70464,18.855474,27.938107,11.501779 2003,44.191601,21.118295,23.319083,11.371021 2004,43.258731,20.012328,26.121321,10.60762 2005,40.492542,20.132528,27.479031,11.895899 2006,38.106347,21.400735,28.008001,12.484917 2007,34.331033,23.189216,31.295686,11.184065 2008,30.920635,24.289498,30.839656,13.950211 2009,35.265222,20.952617,29.324852,14.457309 2010,34.477943,24.151465,25.863074,15.507517 2011,34.272932,23.128077,27.031949,15.567042 2012,38.79793,23.458475,31.213999,6.529596 2013,38.798139,23.896113,30.98788,6.317869 2014,40.349718,24.006993,30.249663,5.393626 2015,38.16286,25.312372,31.13106,5.393708 2016,31.65038,24.148554,29.71082,14.490246 2017,36.753162,23.124262,26.176752,13.945824 2018,36.228445,22.563238,28.08411,13.124207