What States are Magnets for Young Adults? You Might Be Surprised

As detailed last year, the strongest population growth of late according to the Census Bureau was in Nevada, Idaho, Utah, Arizona and Florida. Above-average growth in these states is likely not surprising to most housing market executives. However, population growth is comprised of numerous factors that are not entirely related, including domestic migration, immigration and the age of residents, which influence birth rates and death rates.

To isolate one of these important pieces, we analyzed state-to-state migration trends in 2017 for the heart of the Millennial generation, those 25-29 years old. Essentially, we wanted to quantify where young adults in the prime of their household forming years are moving and where they are coming from. As we will detail further, what we found was that state-level in-migration is often very different than out-migration, even among the same age cohort.

To start, we analyzed approximately 450,000 households headed by a 25-29 year old that moved across state lines in 2017. By comparing each state’s share of 25-29 year old inbound movers to their overall share of this age cohort, we can identify “winners” and “losers.” For example, Washington accounts for 2.8% of national 25-29 year old households but captured 4.5% of movers crossing state lines. The other top states were Colorado, North Carolina, the District of Columbia and Maryland. California, Ohio, Texas, New York and Michigan led states not claiming their fair share.

Texas being a relative loser surprised us, and likely our readers. But it is true that Texas captured only 7.7% of these movers despite holding a 9.3% share of all 25-29 year old households. However, unlike the other aforementioned losers, Texas protects its existing resident base better than any other state as 25-29 year olds leaving Texas represented just 6.3% of out-migration across the country, well below its market share of these households. Interestingly, the states from which Texas disproportionately draws inbound movers (Illinois, Louisiana and Arkansas) are different from the ones where it is donating at an above-average rate (Colorado, New Mexico and Oklahoma).

California offers an even more extreme example of in-migration differing from out-migration. No state is losing more frequently among 25-29 year old movers than California, as its 8.0% share of inbound movers easily trails its 10.2% share of the nation’s 25-29 year old household population. Surprisingly, inbound moves to California were led by Virginia, Massachusetts and New York, which collectively account for 11% of 25-29 year old households outside of California but represented 25% of those moving into the state. We would attribute this differential to employment-driven opportunities.

This is further fascinating when juxtaposed against the above-average destination states for young adults leaving California. Washington, Nevada and Arizona are home to 7% of 25-29 year old households but claim 28% of those fleeing California, likely in pursuit of a more attractive cost of living.

Many demographic dynamics are best understood in pieces rather than in aggregate given that separate analyses brought together often result in a completely different conclusion than if starting from a higher level. In our opinion, state-to-state migration trends can be characterized this way.