Slump Creates Lack of Mobility for Americans

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By SAM ROBERTS

Published: April 22, 2009

Stranded by the nationwide slump in housing and jobs, fewer Americans are moving, the Census Bureau said Wednesday.

The bureau found that the number of people who changed residences declined to 35.2 million from March 2007 to March 2008, the lowest number since 1962, when the nation had 120 million fewer people.

Experts said the lack of mobility was of concern on two fronts. It suggests that Americans were unable or unwilling to follow any job opportunities that may have existed around the country, as they have in the past. And the lack of movement itself, they said, could have an impact on the economy, reducing the economic activity generated by moves.

Joseph S. Tracy, research director of the Federal Reserve Bank of New York, said the lack of mobility meant less income for movers and the people they employ and less spending on renovation and on durable goods like appliances. But, Dr. Tracy said, the most troubling prospect is that people were no longer able to relocate for work.

“The thing that would be of deeper concern is if job-related moves are getting suppressed and workers are not getting re-sorted to the jobs that best use their skills,” he said. “As the labor market started to improve, if mobility stays low, you can worry about the allocation of workers.”

How long will the downturn in mobility last? Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana, said, “I think it will be well into next year before we see any growth in migration, and that still may be optimistic.”

“If the stock market rebounds before the housing market, we might see a scramble for retirement housing,” Professor Hicks added.

The American Moving and Storage Association said the number of people changing residences had been dropping for four years and fell 17.7 percent from 2007 to 2008. The first quarter of 2009 is likely to be even worse, the trade group said.

“We saw a standstill in new home construction, so there was no domino effect from people moving,” John Bisney, a spokesman, said. “People are a little nervous about getting a mortgage. And the recession is so broad-based it’s not as if you can pull up stakes and move to a part of the country that’s growing.”

Jed Smith, a research director for the National Association of Realtors, said that on average it took a homeowner 10.5 months to sell a house in 2008 compared with 8.9 months in 2007.

“Generally speaking, people move based on the economy,” Dr. Smith said, “and obviously the economy in 2008 was mediocre to bad. That would tend to have a negative impact on people’s desire, ability or need to move.”

In its report Wednesday, the Census Bureau said that Americans’ mobility rate, which has been declining for decades, fell to 11.9 percent in 2008, down from 13.2 percent the year before and setting a post-World War II record low. Moves between states dropped the most, to half the rate recorded at the beginning of this decade.

In addition, immigration from overseas was the lowest in more than a decade, which experts attributed to the lack of jobs. Over all, movers were more likely than nonmovers to be unemployed, renters, poor and black.

For decades, several trends have driven a decline in American wanderlust.

Home ownership rates have risen, and owners are typically less likely to move than renters. Two-earner families have become more common, and finding employment for both spouses in a new location can be challenging. Americans’ median age has been climbing, and it is younger people who usually move most often.

“It does show that the U.S. population, often thought of as the most mobile in the developed world, seems to have been stopped dead in its tracks due a confluence of constraints posed by a tough economic spell,” said William H. Frey, a demographer with the Brookings Institution.

Dr. Frey predicted that the foreclosure crisis might spur more local mobility, within or between counties, as families shift to rented quarters or move in with relatives.

Robin Camacho, a Las Vegas real estate agent, expressed surprise at the census mobility figures, given the high foreclosure rates in his city. “If people are losing their homes and tenants are being forced to vacate,” Ms. Camacho said, “then this just doesn’t jibe with what I intuitively think. I see people moving constantly because they have no choice.”

Patrick Bonnema, sales manager for Anderson Brothers Moving and Storage in Chicago, said local residential moves were “down drastically over the last six months.”

“I’m not surprised this has happened,” Mr. Bonnema said. “Look at the economy, look at the banking industry, look at the credit industry. People can’t move, what are they going to do? Their homes are now worth less than what they originally paid, and they don’t want to take a loss.”

Those surveyed by the census said they moved for housing, family and job reasons, in that order.

Suburbs gained 2.2 million movers while major cities lost 2 million. Immigrants, though, appeared less likely to settle in the suburbs in 2008, compared with recent years.

“The housing crunch and its impact on employment in construction, plus the demise of sub-prime lending, gave immigrants fewer opportunities for living and working in the suburbs than in the immediately preceding years,” Dr. Frey said.

The influx of 1.1 million overseas foreigners was the lowest since the 780,000 in 1995.

Among movers, the South recorded the largest net gain, but the gain was the smallest in five years.

Steve Freiss contributed reporting from Las Vegas; Rebecca Cathcart from Los Angeles; and Lori Rotenberk from Chicago.