Why Millennials Aren't Moving
Americans aged 18 to 34 years old are moving at record-low rates. Total household mobility across all age brackets stood at 10.9% in 2017, the lowest mobility rate in over 50 years. While fewer Millennials are moving annually, their reasons for moving have become significantly more positive than during the Recession. Following the Financial Crisis, most young Americans moved for negative reasons, like cheaper housing. Since 2009, the reasons for moving have shifted toward more positive goals like moving to own not rent, to obtain new or better housing, or to relocate to a better neighborhood.
Since the Baby Boomers moved to establish their own households in the 1970s and 1980s, mobility amongst the 18 to 34-year-old age bracket has declined proportionately. However, household mobility has declined amongst all generations. Despite the decline, young Americans are still more likely to move than older households. Trulia reports that the top three reasons why millennials are moving is to establish their own household (19.0%), upgrade to new or better housing (16.1%), or change jobs (11.9%), followed by the less common reasons to improve commute (7.5%), or for cheaper housing (7.2%).
From 1962 to 2017 the share of young Americans ages 18 to 34 years old living with parents or other family members increased to 38.4% from 28.7%. Numerous economic hypotheses purport student debt, delaying marriage, and rising rents and home prices as the causes for these prolonged stays with relatives. Trulia housing analyst, Alexandra Lee, explained, “The reasons behind millennials’ recent low mobility are not generation-specific. Mobility rates have steadily declined in the last decades, proportionality across all age groups. […] For the millennials who are moving, they’re moving more to strike out on their own rather than for traditional reasons such as getting married.”
Instead of just moving out for marriage, Millennials are twice as likely as they were in 2000 to move out and establish their own household. More Millennials are also moving to own instead of rent or improve their housing rather than downsize or cut costs with cheaper housing, a sign of economic recovery and strength. Thus, the housing demand is even stronger for starter homes and smaller homes, straining available for sale inventory. Job-related moves for young women has increased, while job-related moves for young men has remained constant, a signal of equal employment opportunity.
The housing industry has continued to grapple with a lack of inventory, creating a competitive market and in some cases sustained home price appreciation. With home builder confidence high, and residential construction numbers for 2017 strong, builders may be closer to closing the gap between supply and demand.
Sources: Forbes, Trulia, MBA Newslink