High-earning Americans drove 2020’s migration boom, and it shows how wealth is splitting the millennial generation

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High-earners were most likely to move and buy a house in 2020.

Americans stopped moving around the 1980s, but that changed last year with remote work.

A new Apartment List report that surveyed 5,000 Americans and analyzed US Census data has confirmed the migration narrative of 2020: Remote work ignited a residential migration rebound as the number of movers increased by 14% to 16% from 2019 to 2020 – it was the first US migration increase in over a decade.

This has big implications for millennial homebuying in particular and wealth inequality in general. The ApartmentList data shows the migrants were largely high-income, meaning that migration was K-shaped, just like the uneven economy born by the coronavirus pandemic. With migration has come a boom in homebuying, and millennials have taken the lead in homebuying, with high-net-worth millennials at the top of the K.

Although the study doesn’t break down generational data, millennials likely comprise many of the high-income households, defined as those earning over $150,000. A previous Apartment List report revealed that the millennial homeownership rate climbed to 47.9% from 40% just three years ago. Many of these millennial homebuyers were likely the same as the 16% of high-income workers that moved over the past year, a 39% jump from the Census Bureau’s estimate of American migrants in 2019.

This marks a sharp contrast from the past decade, in which lower-income workers led migration patterns. Low-income households moved during the migration boom as well, per the report, but the high-income group is more likely to work in flexible jobs. They’ve taken advantage of remote work to move across the country in search of more space and more affordable housing.

Apartment List also found that high-income workers were twice as likely to purchase a home as low-income workers, which dovetails with millennials reaching peak homebuying age during the pandemic and leading the housing recovery. Historically low interest rates made more types of homes viable for the generation, at least for those who had enough money saved to win out bidding wars in a cutthroat market.

Other millennials were priced out as housing prices reached record highs, while others still couldn’t even fathom becoming homeowners. Many moved back home with their parents during the pandemic, either temporarily or permanently. According to a Pew Research Center report, 52% of young adults lived with at least one of their parents as of July 2020, topping the last high of 48% many decades ago, in 1940.

The millennial wealth gap

This migration divide exemplifies the intragenerational millennial wealth gap, which has widened during the pandemic. Such millennial inequality dates back to the Great Recession, with wealthier millennials faring well while their low-earning peers are struggling.

The affordability crisis millennials were already facing prepandemic has left some with little wealth to fall back on as they experience unemployment and other hardships during the coronavirus recession, causing some to move back in with their parents. But a smaller, higher-earning group with stable income has been able to save, invest, and even buy homes with extra money they would otherwise spend in non-pandemic times.

Millennials are experiencing their own K-shaped recovery, uniquely compounded by two recessions. Generational researcher Jason Dorsey, the president of the Center for Generational Kinetics, previously told Insider this could lead to an unequal recovery between these two groups, with those those who lost a job recovering longer than those who began the pandemic with a better financial backstop.

This uneven rebound might have an effect on migration as well. As the report concludes, continuing migration patterns could further redistribute wealth away from the country’s biggest and priciest cities.

Read the original article on Business Insider