Ward Capital Management

More Americans Leave Expensive Metro Areas for Affordable Ones

by Chris Kirkham

11/01/2016

Americans are leaving the costliest metro areas for more affordable parts of the country at a faster rate than they are being replaced, according to an analysis of census data, reflecting the impact of housing costs on domestic migration patterns.

Those mostly likely to move from expensive to inexpensive metro areas were at the lower end of the income scale, under the age of 40 and without a bachelor’s degree, the analysis by home-tracker Trulia found.

Looking at census migration patterns across the U.S. from 2010 to 2014, Trulia analyzed movement between the 10 most expensive metro areas—including all of coastal California, New York City and Miami—and the next 90 priciest metro areas, based on the percentage of income needed to pay a monthly mortgage on a typical home.

The net population flows skewed away from the most expensive markets, though the trend became less pronounced for those higher up the income scale. For example, there was a net flow of more than 27,000 people making less than $30,000 from high- cost markets to more affordable markets throughout those five years, but for those making more than $100,000, the net loss declined to 2,438 people.

The census data don’t specify why a person moves, said Ralph McLaughlin, Trulia’s chief economist, but the disproportionate impact on lower-income people suggests housing costs are a pressure point.

“All theories suggest that when a market becomes increasingly unaffordable, those that bear the burden are those on the lower end of the income distribution,” he said.

The data look exclusively at movement among people within the U.S., not international migrants. Other recent research has shown a similar trend of migration from expensive markets to inexpensive ones.