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Moving house: stay-at-home trend may hurt economy — and your mood

The pandemic fuelled a race for space by cooped-up city dwellers. But US evidence suggests the increase in relocations was temporary. The long-term trend is for people to stay put. In 2021, individuals were less than half as likely to move as they were in the 1970s, according to the US census.

Even so, Americans are more footloose than citizens of almost all other countries. An exception is Australia, where nearly half the country moves within a five-year period, according to OECD figures. Mobility is particularly low in eastern and southern European countries. That could be linked to rates of home-ownership there that are often more than 80 per cent.

One explanation of the mobility slowdown is changing patterns of employment. The need to move to find work has eased in the UK since the 1990s, according to the Resolution Foundation think-tank. Ageing populations and the rise of dual-earner households also make moves less likely or harder to arrange.

Rampant house price inflation, fuelled by easy money in the pandemic, can put the housing ladder — or the next rung of it — out of reach. High transaction taxes also act as a brake. A 2 percentage-point increase in UK stamp duty cut mobility by 37 per cent, one study found. A recent 15-month stamp duty holiday changed Britons’ attitude to moving.

People understandably dislike having to move away to get on. The levelling-up drive, addressing geographical inequality, recently announced by the UK government, is a recognition of that. But there are some downsides to a more rooted society.

Lex chart showing share of population changing address within 5 years

Immobility damages the economy, not just because it stops people shelling out so often on new furniture and carpets. It also makes the labour market less flexible. If people cannot move house, they may not be able to take up better jobs or move to a more productive part of the country. Macroeconomists have found a link between increased home-ownership and rising unemployment, though that could be weakened by the work-from-home trend.

There could also be a more subtle impact. Moving is stressful. But since the 1970s, there has been a big increase in the number of Americans who feel trapped in their neighbourhood, according to a recent study by a Princeton University psychologist and colleagues. That correlated with reduced trust, happiness, risk-taking and optimism. Getting moving might not just benefit the economy. It could boost people’s mood too.

The Lex team is interested in hearing more from readers. Please tell us the pros and cons of moving house in the comments section below.

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