The determinants of residential consumption as a consequence of interregional migration.

Abstract

The focus of this study was to further the understanding of the importance of household characteristics in the tenure (buy or rent) decision-making process. The links between behavior and household factors for in-migrants were examined and a behavior model was developed to explain the housing choices of renters who had recently migrated. Apartment renters with five years or less residency in Tucson, Arizona were surveyed to determine what factors explain their tenure decisions. The study sought answers to the question of why so few new arrivals were buying homes when affordability was at the best level it had been in five years. The methodology of the study involved two surveys: a preliminary personal survey to screen for newcomers and an in-depth self-administered survey. The mail-back survey was effectively utilized to obtain data on the characteristics, perceptions, and homebuying intentions of renting newcomers. The results of the survey supported four main hypotheses: (1) The tenure decision is directly related to residential history in prior locations and in the current city. (2) Socio-demographic determinants impose significant effects on the tenure decisions of in-migrants. In addition to the oft-researched population variables, leisure factors were incorporated in this analysis of life cycle. (3) Place ties exert influence as pull factors in the tenure decision. Place ties to past residences and to potential future destinations inhibit home purchasing decisions, while place ties to the current city retard migration and facilitate homebuying. (4) The tenure decision is impacted and restricted by economic constraints. The economic constraints go beyond income to include down payments, pricing, financing, and previous home sales.