In addition to focusing on older Americans' role in the second house market, Housing Trends Among Baby Boomers, a study jointly conducted by Research Institute for Housing American, a division of the Mortgage Bankers Association and Radian also looks at a trend that has been widely reported: a supposed migration of Baby Boomers and empty nesters from the suburbs to the city.

Anecdotal reports of this alleged movement have come from urban universities which note large numbers of older persons signing up for courses and from real estate agents who feel they have spotted a trend among their buyers and sellers. This migration has been widely reported in the media and in some areas real estate developers have responded by building condo and townhouse developments designed to attract suburban empty nesters.



We reported earlier on the portion of the MBA study investigating ownership of second homes. The urban migration part of the study used the March 2005 Current Population Survey (CPS), a large, long-standing, nationally representative, randomly sampled survey given every month to Americans of all ages. The survey collects data on income and labor market behavior but also contains information on homeownership and geographic mobility. This particular survey asked questions about one-year and five-year homeowner activity. The MBA study also included information from the 2000 Census for comparison purposes.

This portion of the study focused on a slightly younger group of homeowners than the second home portion. Data was collected from "retirement age" homeowners between the ages of 50 and 69 and living in a metropolitan area at any time in 2000 to 2005. This yielded a sample of 16,000 homeowners. In order to insure that the relative infrequency of moving events did not contribute to erroneous findings, the study included data derived from a five-percent random sample of households from the most recent U.S. Census. Both data bases contain information about five-year mobility patterns.

The study presented a picture of the behavior of homeowners in metropolitan areas with the suburban to urban migration being only a part of the picture. Overall the CPS reports that 87.2 percent of all retirement age households are homeowners; 90 percent of white households were homeowners as were 75 percent of non-white households. Over 90 percent of married couples owned their own homes and homeownership increases with education. The rate of homeownership rises gradually with age but steeply with income. 84.1 percent of these older homeowners were empty nesters although, because more educated persons tend to start their families later, the percentage of households without children fell by education level. The survey found that empty nesters are substantially better off economically than the home-owning population as a whole.

Almost 18 percent of all homeowners had moved during the previous five years although mobility was highest for white and highly educated homeowners. The only cohort scoring higher than 20 percent was widows; around one-quarter of this group living in metropolitan areas had moved in the five year period. Overall, empty nesters were no more likely to have moved than homeowners with children.

But, are older suburban homeowners returning to the cities that they may have fled years earlier, seeking provide better schools and recreational opportunities for their children? Are they fulfilling a lifetime dream of living within walking distance of upscale restaurants, museums, galleries and theaters?

In a word - no.

Of those metropolitan, empty-nest, retirement-age homeowners who had moved in the five year window of the CPS study, the majority moved to new residences in areas similar to where they had previously lived. 79.5 percent of suburbanites who relocated merely moved to another suburban house or condo while 11.1 percent moved into the Central City. Almost as many suburbanites moved to non-metropolitan areas (9.4 percent) as moved city-ward.

In fact, folks who lived in the Central City were far more likely to move to the 'burbs than vice-versa. 35.4 percent of city-living subjects (in 2000) had moved to another urban location by 2005 while 52.5 percent had out-migrated to the suburbs and 12.1 percent to a non-metropolitan area. When 2000 Census data was similarly analyzed (this covered the 1995 - 2000 period) figures generally fell close to the CPS data. The greatest disparity was in relocation patterns of urban residents who, in the Census study, stayed in the Central City 51.4 percent of the time and moved to the suburbs 42.8 percent of the time.

When suburbanites migrated to the cities they were more likely to pick a big one. The ten largest metropolitan areas (Atlanta, Chicago, Dallas, Detroit, Houston, Los Angeles, New York, Orange County (CA), Philadelphia, and Phoenix) consistently attracted more suburban homeowners than all other metropolitan areas. Across all age groups about 12 to 14 percent of those moving chose the big cities while the smaller metro areas attracted about 7.5 percent.

76 percent of older suburbanites who moved to urban areas were white, 60 percent were married, and 25 percent were divorced. Slightly more than 40 percent had college degrees and the same percentage was under the age of 55. Around 50 percent had incomes of $40,000 or less and 75 percent had incomes of less than $70K. However, those moving to the Central Cities of the 10 largest metro areas were more likely to be non-white, more highly educated, and to have incomes higher than $70,000 than those moving to other metropolitan areas.

The study concludes that suburban retirement-age homebuyers are not flocking to the suburbs in significant numbers and, in fact, not even in numbers sufficient to offset the effect of younger homeowners moving in the other direction. The net migration effect from the suburbs to urban areas is -7.2 percent.

Since the study was funded by a division of MBA, the conclusions reached by the author focus mainly on the ramifications to the mortgage industry.

Gary V. Englehardt concludes that, even though the second-home market will continue to be relatively small it will provide sustained future growth in mortgage activity simply because of the sheer size of the Baby Boomer generation.

Suburban to urban migration will likewise not be a Boomer phenomenon. "The Middle and Late Baby Boomers might turn out to have substantially stronger tastes for urban living in retirement. However, if the experience of the Early Baby Boom and older cohorts is at all predictive of future activity, it would seem that substantial growth in the urban homeownership rate by older households due to migration from the suburbs is unlikely." The primary driver of demand for second and urban retirement homes will be the growth in the number of older persons because of the aging of the Baby Boomers.