Economy, Housing Woes Slow Migration, Census Shows

Can you name one way that Michigan and Florida are alike? A correct answer would be that both states lost more migrants than they gained last year, among persons moving within the United States. So says the U.S. Census Bureau in its newly released population picture. (Chart 1)

No surprise that Michigan lost population in light of the blow to the Big Three automakers and the state’s high unemployment rate. That Florida showed a net loss of migrants is astounding.

The Sunshine State has been a major migrant destination for decades and led the nation in total migration—adding 150,000-270,000 annually—as recently as 2000-2005. Yet, were it not for immigration and fertility, Florida would have lost population last year, as it ranked only 30th in growth among the 50 states. The slowing population tide may be attributed to Florida’s high rate of mortgage foreclosures, which drove people out as well as deterred potential arrivals.

Florida’s experience, as with other states in the high-growth Sunbelt, is emblematic of the crazy quilt of demographic shifts that can be linked to our current economic woes. What has been a depressing year for the economy has also depressed migration to areas that traditionally have been the nation’s biggest magnets—especially in the Mountain West and Southeast.

The new Census estimates cover annual change through the year ending July 2008. Since this takes in the first seven months of the current recession, these data give us the first real glimpse of how migration and population growth are responding to the housing slowdown, credit crunch and broader recession as the woes spread from state to state.

Unlike earlier economic downturns that affected migration in previously fast-growing areas (eg. Houston and the oil patch in the late 1980s), this one is not isolated to specific regions with slumping industries. This recession is tied, in large measure, to a dismal housing market and the credit crunch, pervasive in much of the country, which has not allowed people to sell their homes, should they want to move, or to buy new homes in previously hot destinations. Employment opportunities in many Sunbelt states have dried up, as have the more affordable houses.

The result, according to the Census estimates, are new, sharper migration slowdowns in Arizona, Nevada and Florida (which become negative) that were already evident last year, and a greater spread of shrinking migration to such states as Georgia, North Carolina and Tennessee in the Southeast, and Idaho and Utah in the West. Among the 28 states that gained domestic migrants in 2006-07, all but five received fewer migrants in 2007-8, including Florida, Missouri, Indiana and Mississippi, which flipped from migration gains to losses. (Charts 2 and 3, Table 1)

On the flip side, many would-be movers remain stranded in coastal states that used to be considered “unaffordable.” In 2004-05, both California and New York lost about a quarter-million migrants to other parts of the country. But with more people staying put in the last year, California’s migration loss shrunk to 144,000; New York’s to just 126,000. A similar retention of potential out migrants occurred in Massachusetts, New Jersey and Connecticut as many young couples, empty nesters and retirees attempt to hang on until new opportunities arise.

The new migration shifts affect the overall population growth of states in both the Sunbelt and Frostbelt. While states soaked by the sun, by and large, still grow faster than other parts of the country, their levels have fallen dramatically. This is exemplified by Utah. While Utah was the fastest-growing state in the most recent year, its 2.5 percent growth rate dropped from 3.2 percent in 2006-07. Nevada’s growth rate dropped a whole percentage point (from 2.8 percent to 1.8 percent) Of the ten fastest-growing states, only one (Colorado) grew faster this year than last. (Table 2)

So we seem to be in a land of transitory limbo as movers remain flatfooted, waiting for markets to clear. Making a move, especially when it is tied to buying a new home and starting a new job, involves taking some risk. The evidence, released with the new Census statistics, shows that in this market and at this time, many Americans are not taking that risk.

Supporting Materials
Chart 1: Michigan and Florida Net Domestic Migration, 2000-1 to 2007-8 »
Chart 2: Migration Boom than Bust States »
Chart 3: Greater Migrant Retention for Out Migration States »
Table 1: States Ranked by Domestic Migration 2007-8 »
Table 2. States Ranked by Growth 2007-8 »