Thinking it's time for a change of scenery - or even a change in career? Whether you have already put down roots with your family or are at a point in your life when it just feels right, you aren't alone in considering a relocation to another city (or even another country) for new work opportunities or just for a new start. But when it comes time to make the decision to stay or go, it can be difficult to know what comes next.
"Younger adults are moving less than they used to, but that doesn't mean they shouldn't."
According to some recent data on American moving trends, researchers have found that fewer people are relocating to different cities than they did in the past. In fact, Pew Research Center found that U.S. residents are relocating at the lowest rate on record, stretching back to the 1960s. In 2016, only 20 percent of Americans between 25 and 35 years old said they had lived at a different address in the prior year. That same age group has posted one-year migration rates as high as 27 percent in 1990 and 26 percent in 2000.
Some researchers are confused why this trend of young adults favoring relocation seems to have shifted recently. That's especially true because today's 25- to 35-year-olds are far less likely to have either a house, a spouse or a child than was true for the same age group in previous decades. Theories as to why we are seeing a reversal of this trend center on new economic realities, including the high cost of housing and a reshuffled job market. In short, it appears young adults no longer see relocation as an economically advantageous decision.
Still, the primary reason for relocation cited by young adults who did so was not for their career, but to fulfill their desire to own a home. Indeed, homeownership confers many benefits of the financial and emotional variety, but that doesn't make the decision that much easier for most of us. So for those who are seriously considering a move, especially to buy a first home, what are the key factors to look for?
Choosing a new city
If distance is no object and the entire continental U.S. is your oyster, consider a small- or mid-sized city for a first home, or just a more affordable one. A study from Nerdwallet of home prices, job prospects and quality of life in major metropolitan areas across the U.S. found several smaller cities where real estate was relatively affordable and neighborhoods were extremely livable. Analyzing these and several other characteristics, Nerdwallet found some of the best small cities worth moving to shared a few things in common:
- They were still close to big cities. Nine out of the study's top 10 picks were considered suburbs outside major population centers, which bodes well for the labor market, school quality and local culture among other benefits.
- Many were in Texas. Perhaps as one of the largest states, it might not be surprising that four of the top 10 were in the Lone Star State. But its major cities also happen to be experiencing rapid growth in recent years.
- The best of the best are growing fast. On average, Nerdwallet's top 10 choices boasted a population growth rate of nearly 25 percent between 2010 and 2015 - four times the national average. While median incomes in these cities were also found to be rising faster than at the national level, it means homes and jobs in these cities may be running out quickly.
Reducing moving expenses
Relocating to a new city certainly offers a number of financial incentives, but it's often an expensive and laborious process in the months preceding move-in day. To make the most of your move and save as much as possible, do all the right research beforehand and well in advance.
- If possible, avoid scheduling your move during peak months (generally the summer) and on the last weekends of any month. This will make it easier, and often cheaper, to rent a truck or book a professional service.
- When undertaking any particularly complex move, especially across state lines, go with a reputable moving company and stay away from lowball offers that sound too good to be true. The Federal Motor Carrier Safety Administration offers an online tool where you can look up a moving provider to ensure they have the proper credentials.
- Take every possible step to reduce expenses by downsizing and performing as much packing and hauling as you can on your own. As soon as you start to consider moving, begin the process of sorting through your possessions and donate or throw out things you no longer need. When it's time to pack, accomplish what you can on your own, or invite some friends over to help (just don't forget the pizza and drinks afterward).
- After everything is settled, don't forget about an often-overlooked tax incentive for relocating. If you moved at least 50 miles from your original home for a full-time job, you might qualify for an IRS rule that allows you to deduct some qualifying moving expenses from that year's income tax return. Be sure to save receipts and proof of employment to get the most benefit from this rule.
Relocating can be daunting, risky and expensive, but there could be several enormous rewards in store once accomplished. Talk to a financial professional for even more tips on how to plan and budget for these costs.
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