Millennials Looking for Affordability and Jobs whereas Baby Boomers Looking for Affordability and Warmth
Labor mobility in the U.S. has declined in recent years. Home owners are staying in their homes longer than in previous years. Corelogic data show homeowner mobility declining gradually over the past three decades. Those homeowners who have wanted to move seem to be driven by economic opportunities, affordability and weather. This blog uses the CoreLogic Loan Application Database to highlight the recent trends in owner-occupant homebuyer mobility and migration for 2016, focusing on the states with the most in- and out-migration of potential homebuyers.
According to CoreLogic data, homebuyers from high-cost states, such as California and New York, moved to more affordable states, such as Florida, Texas, Arizona and the Carolinas in 2016. California had the largest number of out-migrants in 2016, followed by New York and Virginia. In contrast, Florida had the largest number of in-migrants in 2016, followed by Texas and North Carolina.
The left-hand side of Figure 1 shows ratios of state-level outflow and inflow of homebuyers in the states with the largest number of interstate moves and the two principal destinations of moves in 2016. Conversely, the right-hand side of Figure 1 shows ratios of state-level inflow and outflow of homebuyers in the top states and originations of moves in 2016. New York ranked highest in the ratio of homebuyers moving out to homebuyers moving in (3.9), followed by California (3.4), Illinois (2.3), Virginia (1.3), and Pennsylvania (1.2). On the other hand, Florida ranked the highest in the ratio of homebuyers moving in to homebuyers moving out (2.9), followed by South Carolina (2.6), Arizona (2.3), North Carolina (1.7), Georgia (1.4), and Texas (1.3). A ratio of 3.9 for New York means that for every out-of-state loan applicant moving into New York, there were about four loan applicants moving out of New York. Similarly, a ratio of 2.9 for Florida means that there were almost three out-of-state loan applicants coming to Florida for every one moving out of Florida. The trend shows overall homebuyers were moving to more affordable and warmer states.
Where are millennials and baby boomers buying homes?
Preferences and priorities for location to buy a house to live in vary by age. In 2016, Texas had the largest number of millennial in-migrants, whereas Florida had the largest number of baby boomer in-migrants. Job opportunities, cheaper homes, no income tax and lower cost of living could be the main triggering factors for the millennials’ move to Texas. Better natural amenities (warm weather, proximity to beach, sunny days), lower taxes (no state income tax, no inheritance tax or estate tax), lower cost of living and affordable housing could be the main factors causing baby boomers to move to Florida.
Figure 2 compares the state-level outflow and inflow of homebuyers for millennials and baby boomers who applied for home-purchase mortgages in 2016. Data indicates that millennials were applying for mortgages in bordering states with lower home prices. For instance, millennial applicants from New York applied for home-purchase mortgages mostly in New Jersey and Pennsylvania; from California, they applied for mortgages in Nevada, and from Illinois they applied for mortgages in Indiana and Wisconsin. Millennials seemed to be moving for affordable homes, employment opportunities, lower taxes and open spaces.
In contrast to millennials, data show that baby boomers preferred warmer states, along with affordability. Baby boomers from New York, Illinois, Virginia, Pennsylvania, Ohio and Maryland applied for home-purchase mortgages in Florida the most. Baby boomers seemed to be moving for warmer weather, lower taxes and affordable homes.
2 The analysis is based on the number of applicants who applied for home-purchase mortgage loans in 2016.
All home-purchase mortgage applications, accepted or not, January 2016 through December 2016 were included in the analysis. Investors and second-home buyers were excluded in the analysis.
3 Red labeled states were the top two destinations for the out-migrants. For example, New Jersey was the top destination to buy a home for New York residents, followed by Florida. Similarly, green labeled states were the top two origination states for in-migrants. For example, Florida got most of its out-of-state residents from New York followed by New Jersey.
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