Mobility Trends: People Just Don’t Move Like They Used To
today at 7:30 am
OK. This blog post sounds an awful lot like the one I did a little over 2 1/2 weeks ago where I talked about how long people are staying in their homes. But the data I shared in that post was less than ideal. It was biased by only looking at people who moved and it didn’t really answer the question people really want the answer to. That is…what percentage of people move each year?
So when I stumbled on this census bureau data recently I decided to do a quick update and share it. I thought it was pretty interesting and it looks at the entire population, whether people are moving or not.
As you can see in the graph below they show the mobility trends over a 30+ year period and they break it down between renters and homeowners. As expected renters move a lot more frequently – i.e. a greater percentage move each year – than homeowners. There are some simple explanations as to why this would be true:
- People rent because they know they might need to move for various reasons
- When you rent it’s easier to move (no place to sell) so why not?
- Renters tend to be younger, with less accumulated crap, so it’s easier to move for that reason also
- Younger renters have fewer ties (e.g. no children, which are a different form of accumulated crap) to a particular area so it’s easier to move
But the other big takeaway from the graph is how dramatically the mobility rate (percent of people who move each year) has declined over this time period – for both renters and homeowners. Although the mobility rate of homeowners is half of what it used to be it has stabilized in the last 10 or 11 years.
Think about it. A 5% mobility rate for homeowners translates to an average homeowner tenure of 20 years! And, when you consider that a lot of people move way more frequently than that, it means that some people are staying put for a lot longer than 20 years. Well, I can’t say I blame them when real estate commissions are so high and moving ain’t cheap. As I mentioned last time, people moving less frequently is not great for the real estate industry or the labor market but it’s probably better for people’s finances – at least in the short run.
#RealEstate #HomeOwnership #Moving
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market or get an insider’s view of the seamy underbelly of the real estate industry you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.