National Mortgage News reports that high home prices are leading more Americans to stay put, slowing down internal migration.
Exorbitant home prices have outweighed the benefit of bigger paychecks for households deciding whether to move to areas with greater job opportunities, while the allure of cheaper properties in less-prosperous regions has failed to make up for smaller salaries in those places, according to an International Monetary Fund working paper released this month.
"Increasing house price and income inequality" accounts for about two-thirds of the fall in long-distance migration between rich and poor U.S. areas in recent decades. Using Internal Revenue Service data, as well as figures from real-estate data provider Zillow Group Inc. and the U.S. Census Bureau, authors Tamim Bayoumi and Jelle Barkema tracked migration flows between areas of varying affluence, monitoring some 200,000 moves over 20 years between regions at least 200 miles apart.
About 72% of the decline in moves from poor to rich areas can be explained by regional house-price differentials, the authors found after controlling for other variables, with 66% of the drop in relocations from rich to poor attributable to rising income inequality.