A new study finds that housing prices have had a big effect on recent mobility. Here’s a snippet from Real Time Economics.
Housing affordability has played a greater role in prompting residents to leave one state for another over the past decade, according to a study released by the Federal Reserve Bank of Boston.
This is a change from the past, when jobs were the primary economic driving factor behind state-to-state migration. The study helps explain why migration has fallen off so sharply in this recession — with the drastic fall in housing prices, many people are staying put not for work but because they are tied to a home they either cannot sell or refuse to sell at today’s prices.
The FRB study focuses on New England, which for years has seen a net outflow of residents to other states. The author, Boston Fed economist Alicia Sasser, shows that job growth (or lack thereof) and housing prices played equal roles in New England’s out-migration between 1997 and 2006. Between 2001 and 2006 about 100,000 additional people left Massachusetts either for a job or to seek lower housing prices, according to Ms. Sasser’s research. Roughly 60% of those people left for housing affordability …
Mr. Sasser’s study may give a glimmer of hope to states that have lost people, at least high-cost states like Massachusetts that have lost people to places with lower-priced housing (cities like Buffalo that have lost jobs will likely continue to lose residents.) When the economy eventually picks up, lower housing prices may bring the balance between jobs and home prices back into equilibrium, prompting more New Englanders to stay where they are or even move back.