A trend that was interrupted by the Great Recession — Americans relocating to the West and South — has resumed as the pace of moving picked up in 2012, according to the U.S. Census Bureau. As reported in today’s Wall Street Journal, growing metro areas include some of those hardest hit by the recession, including Phoenix and Las Vegas, as well as cities partaking in the oil boom in North Dakota and Texas.
Those on the decline in terms of losing population include Philadelphia and Detroit. The Census Bureau reported separately that in 2011, 4 percent of the U.S. population moved to a different county, the highest rate since before the recession began.
These trends will likely accelerate as the economy continues to improve. That’s a function of both the improving housing and job markets, which, in turn, increases consumer confidence. Consumers who aren’t getting job offers or who are underwater on their homes are more likely to stay where they are; in contrast, those who can sell their house or who can afford to buy after renting — or in the case of young people — living at home with their parents or graduating from college or grad school, are more likely to move.
The trend among young people leaving home and forming new households is especially encouraging for the economy. Young people who form new households, whether they buy or rent, impact the economy in multiple ways — buying goods to furnish those houses and spurring residential construction, whether of apartment buildings or houses.
Potentially, even a return to normal growth in household formation and residential investment would pay off big for the economy, adding as much as 1.7 percent to overall GDP growth rates in 2013. And since household formation tends to take a while to build, that would likely mean more growth in 2014 and 2015, all good news for an economy that’s suffered more that it’s share of fits and starts since the recession officially ended in 2009.