Multifamily Migration: Who is Moving Where?
While the percentage of Americans moving in a one-year period has fallen to an all-time low, an increasing amount of renters are moving across state lines.
But before we dive into the renter stats, let’s first examine which Americans are moving. More than 35.1 million people — or about 11.2% of the population — moved in 2015, according to Census Bureau numbers released this past November. While over 80% of movers stayed in the same state (61% remained in the same county), 14% of movers crossed state lines in their relocations.
In terms of who was moving, it should come as no surprise that nearly 40% of all movers fell between the ages of 20 to 34 years old.
Where Did Apartment Renters Move From?
Now that we have a better idea of who is moving, lets see how these trends impact apartment buildings. Apartment renters inherently move more frequently than homeowners. Looking at data from the 2015 American Community Survey, we see that 23.7% of renters in small assets (5 to 49 units) moved during 2014. That’s a greater share than the 19.6% of renters in large assets that moved.
These findings reinforce an often cited reason for renting over ownership — mobility.
While the overwhelming majority of renters in small and large properties moved within the same state, this trend is on the decline in the post crisis period (2010 to 2014), as demonstrated in the chart below.
Renter movements across state lines grew at a 3% annual rate for small properties, and an even higher rate of 4% for large buildings.
What’s Income Got to Do With It?
So why an increase in renters moving across state lines? Let’s look at the role of income for part of the answer. As shown below, the share of new renters in large properties with household incomes at $100,000 or more grew at an annual rate of 6% compared to only 0.4% in small properties. Growth rates were similar across asset type for below the $100,000 household income threshold as well.
This seems to indicate that renters at higher income levels — most likely from taking up a higher-paying job in other states — are driving part of the apartment demand in large, centrally located and well-amenitized apartment buildings.
Small properties also gain from a more mobile workforce, but to a somewhat lesser degree by catering to renters at lower household income levels.