It reverses a decades-long pattern of decreasing mobility
According to the Census Bureau, American mobility has been declining since the ‘80s. The annual mover rate, calculated as the percentage of people who change residence each year, has been steadily dropping since before the end of the Cold War and reached its lowest point just before the COVID-19 pandemic. Now, however, a new report from rental search platform Apartment List has shown the beginnings of an uptick in movement, driven by the rise of remote work and led by the economic class least likely to move pre-pandemic: wealthy Americans.
Rob Warnock, senior research associate at Apartment List, explained that for decades a higher income has been inversely proportional to the likelihood that someone moves. Since 2010, though, wealthier Americans have tended to move a little more frequently and in 2020 they led an overall bounce back in residential mobility. Warnock’s survey found more Americans are moving across the board - he explained to MPA why this is happening and what it means for the mortgage industry.
“This has a lot to do with the reshuffling of the labor and housing markets in America as a result of the pandemic,” Warnock said. “The relationship between remote work, income and mobility are closely tied together. People with remote jobs tend to be higher earners, that unlocks the economic flexibility to find somewhere new to live but it gives them the physical flexibility to say ‘I don’t need to be living where I am now. What have I always wanted, because I have the means to go get it?’ It’s a pretty simple story and we see it playing out anecdotally.”
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Warnock admitted that while his survey is designed to be robust and give solid nationwide numbers, it’s not necessarily as unassailable as the census data he’s comparing it to. He’s waiting for the 2020 data to show what he expects is the case, that people started moving more in 2020.
The preponderance of wealthy Americans in this trend, defined roughly as households earning between $100,000 and $150,000, appears largely as the result of the remote work boom. Remote workers tend to earn more than in-person workers as of now and often have different preferences regarding where they end up living and the amenities available to them. These aren’t necessarily the C-suite executives who will remain in job centers and urban cores. Rather, these are the well-paid tech workers who can do their jobs from anywhere.
These wealthier, more mobile buyers are motivated by a range of factors, but Warnock noted that affordability plays an absolutely crucial role in their decision. Many of these higher-earning workers still saw homeownership as out of reach in a city like San Francisco, but possible in St. Louis or Boise. At the same time, many movers were motivated to live closer to family, and other were seeking more physical space and access to nature after a year spent locked down in tiny apartments.
While this shift in mobility may have been sped up by the pandemic, Warnock doesn’t expect this to be a flash in the pan moment. Mobility driven by remote work, he said, will likely continue post pandemic with so many remote workers expecting to stay remote after this period ends. Well-heeled remote workers able to move freely, he explained, will be a likely feature of the housing and mortgage markets for years to come. Warnock thinks that’s good news for mortgage pros.
“Think about the composition of people who are in the market to buy homes,” Warnock said. “If it is, in fact, shifting towards people who are higher earners, who are more geographically flexible, who are more eager to leave behind the market that they were never going to be able to afford, I would suspect that all that paints an optimistic picture for the mortgage industry.”