A paper in Housing Studies, “Housing shortages and the new downturn of residential mobility in the US,” finds a significant downturn in local moves since the Great Recession, particularly among renters. While overall geographic mobility has trended downwards for decades, between 2010 and 2019 the longer-distance mobility rate was flat, while mobility within metro areas fell by a third. The authors point to slow construction, reduced transitions to homeownership, and large numbers of young adult renters competing for scarce homes as factors likely explaining the decline in local mobility.
The authors use American Community Survey data from 2012 and 2018 to examine associations between changes in local renter mobility rates and contextual factors that may restrict housing availability in the 100 most populous metropolitan areas in the US. They take into consideration the vacancy rates in 2012 and 2018, the rate of job growth, permits for new construction, demographic characteristics, household income, and the share of renters who are housing cost-burdened, spending more than 30 percent of income on housing.
The study finds that greater job growth in an area is associated with a steeper decline in local mobility rates, likely because it creates greater demand and more competition for housing. Conversely, more apartment construction is associated with greater local mobility. The researcher also found that increases in local homebuying are associated with increases in local renter mobility. When local homebuyers leave behind rental units as they move, they create rental vacancy chains, opening up opportunities for other renters to move as well. Fewer home purchases and slow housing construction in the wake of the Great Recession foreclosed some opportunities for local mobility.
Perhaps surprisingly, higher shares of metro area young adults (who generally have higher rates of annual residential mobility) are associated with a steeper decline in local mobility rates. A 1 percentage point increase in the share of the population age 25 to 39 is associated with a -0.671 greater decline in the local rental mobility rate. The metros with the highest young adult share declined the most in renter mobility between 2012 and 2018. Greater concentrations of young adults indicate greater aggregate demand for rental vacancies, which could lead to lengthier housing searches and discouragement over finding suitable replacement housing. The authors hypothesize that this “friction of competition” may deter renters from seeking to move, which itself can prevent others from moving into units that would have been vacated.
Finally, higher shares of cost-burdened renters are associated with a steeper decline in the renter mobility rate. While cost-burdened renters may have more precarious tenancies, which could force more frequent moves, renters generally may be discouraged by the outlook in housing markets with higher rates of cost-burden.
The paper can be found at: https://bit.ly/3y3ynum
A summary from the USC Sol Price School of Public Policy can be found at: https://bit.ly/35XHQYh