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December 2019

Americans moving at slow rates

December 5, 2019

Fewer Americans moved in 2018-2019 (for the year ending in March) than any other year since the Census Bureau started tracking that metric in 1947. A report released last month revealed only 9.8% of Americans moved during the latest tracking period; that also marked the first time it fell below 10%.

In the 1950s, about one-fifth of the U.S. population moved each year. Analysts point to demographics and escalating rents for the decline in migration.

The trend is partly a reflection of patterns among millennials as they came of age, suggested William Frey, senior demographer at the Brookings Institution. He said it's also a continued effect of the Great Recession. "Slowdowns in the housing and job markets and delays in marriage and childbearing pushed their relocation rates down substantially," he explained.

Abigail Wozniak, an economist at the Federal Reserve Bank of Minneapolis described the decline in migration as "really widespread." In an interview with The New York Times¸ she noted it applies to "all demographic groups - younger and older workers, renters and homeowners, more-educated and less-educated workers."

While describing the change as important, she stated it is too early to tell if it is good or bad.

The paceof home price appreciation picked up in September, led by Seattle, according tothe Case-Shiller U.S. National Home Price Index. Analysts credit strong demandand tight inventory as factors, and cite lower mortgage rates and "a solidlabor market" for boosting demand.

 

Threemetro areas - San Francisco, Chicago, and Boston - experienced home price dropsin September (the most recent reporting period) compared to the previous month.

 

The U.S.National Home Price Index rose at a seasonally adjusted annual growth rate of4.7% in September, up slightly from the August figure of 4.3%. A comparison ofyear-over-year changes shows the national index increased 3.2% in Septemberfrom the same month a year ago.

 

TheS&P report covering 20 metro areas shows local home prices varied from adrop of 2.1% to a gain of 9.6%. Ten areas surpassed the national average of4.7%, with Seattle's 9.6% gain topping the list. San Francisco had the steepestdrop at -2.1%.

 

The HomePrice Index tallied by the Federal Housing Finance Agency also showed gains,but at different rates. Its Index showed a seasonally adjusted increase of 7.7%in September, up from 2.5% the previous month. FHFA's year-over-year figures revealeda 5.1% gain in September, improving on the increase of 4.8% in August.

 

Thirdquarter house prices edged up 1.1% from the previous quarter, and jumped 4.9%from third quarter 2018.

 

Otherfindings in FHFA's House Price Index included:

·      Houseprices have risen for 33 consecutive quarters across the U.S.

·      Houseprices rose in all 50 states and the District of Columbia between the thirdquarters of 2018 and 2019.

·      Houseprices rose in all 100 of the largest metro areas in the U.S. over the lastfour quarters.

 

A closerlook at local metro areas shows The Tacoma-Lakewood area ranked 16thamong the 100 metro areas with a 6.7% spike in prices for the third quarter of2019 compared to third quarter 2018. The Seattle-Bellevue-Kent area ranked 92ndwith a 1.9% increase in prices from third quarter 2018 to third quarter 2019.Washington, with a 5.6% increase, ranked 18th in the U.S.

 

Homeownerswho want to calculate their home's price appreciation can use FHFA's calculator.That tool projects what a given house purchased at a point in time would beworth today if it appreciated at the average appreciation rate of all homes inthe area. It does not project the actual value of any particular house.

 

TheFHFA-HPI is a weighted, repeat-sales index that measures average price changesin repeat sales or refinancing on the same properties. The agency said it alsoprovides housing economists with "an improved analytical tool that is useful for estimating changes in therates of mortgage defaults, prepayments and housing affordability in specificgeographic areas."