In the past five decades, internal migration within the US has slowed significantly. Older homeowners in expensive states are now less influenced by local home prices compared to previous decades, despite wage incentives for migration. According to a new working paper by economics professors at Williams College, residents of high home price states like California and New York are now less likely to move due to the expensive housing market, with older homeowners being a major factor in this decline.
Migration patterns indicate a movement from the Northeast, Midwest, and California to the Northwest, Southeast, and Southwest. States with high wages and housing prices like California, Illinois, Massachusetts, New Jersey, and New York see a net outflow, while states with lower costs like Georgia, North Carolina, Tennessee, and Texas experience a net inflow.
The decline in migration is attributed to changes in structural aspects of migration choice, affecting people from various backgrounds. Wages play a significant role in migration decisions, with higher wages attracting people to areas with better job opportunities. However, housing prices also influence migration, with a 10% increase in home prices leading to a decline in migration.
Overall, the research suggests that declining internal migration in the US is due to a combination of factors, including changes in wage differentials and housing costs between regions. Despite the potential for higher wages to encourage migration, housing-related factors have offset this effect, making moving decisions less influenced by home prices in the current location.
Older homeowners, in particular, are less likely to move even with increasing home values in their current location. This trend is more pronounced in states like California, New York, and New Jersey, while younger individuals and renters show higher sensitivity to housing prices. The data indicates a gradual shift in migration patterns, with fewer Americans moving each year, but larger moves like cross-country relocations are on the rise.
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