More Affluent Americans Moving Into Cities, Making Them More Expensive

Image courtesy of Hammerin Man

Middle-class and wealthy Americans spent the latter half of the 20th century fleeing cities, but a recent report from the Federal Housing Finance Agency shows that people have been moving into the very centers of cities for the last 25 years, and house sale prices have gone up accordingly.

We’ve mentioned the need for companies and towns to find creative re-uses for large suburban office complexes and abandoned malls, but the interesting thing is that the suburbs aren’t really emptying out: young adults are just heading to cities and staying there when they finish school.

Since 1990, some of the biggest housing price increases have been in the middle of cities, even in smaller cities. “Over the past 25 years, though, people have been paying more to move into downtown central areas, primarily in large cities,” FHFA economist William Doerner told the Washington Post’s Wonkblog.

There’s no single reason for the shift: theories that sociologists and other experts have thrown out include a growing distaste for long commutes by car, and a lower crime in cities. Or is crime lower because more affluent people are moving into the middle of cities?

Working Paper 16-01: Local House Price Dynamics: New Indices and Stylized Facts [FHFA]
Americans are paying more to live in the very places they once abandoned [Washington Post]