Americans make fewest moves since 1962

According to the United States Census Bureau, Americans have all but stopped moving. The New York Timesreports that "The bureau found that the number of people who changed residences declined to 35.2 million from March 2007 to March 2008, the lowest number since 1962, when the nation had 120 million fewer people."

The extent of the decline is somewhat shocking, but the drivers behind it are obvious: People are having trouble selling their existing homes and having trouble getting financing for new ones: If you're underwater on your current home, selling it won't leave you with any cash for a down payment on a new one.

While the decline in mobility is bad for movers and real estate agents, it's probably not a bad thing for many people.

While popular culture glorifies the idea of "trading up" to a bigger home every few years as income improves, moving frequently is an absolute disaster for net worth: It takes time that could be used for working, and there are frictional costs associated with moving: Realtor commissions, moving expenses, closing costs and any renovations/redecorating that need to be done. Financially, frequent moving is generally not a good thing.

Socially, it's not a good thing, either. A house is more than an investment and a place to live. It's your community, your friends, your kids' school, your neighborhood market and video store and coffee shop. Studies show that it takes on average about two years to really settle back into a community again, and if you're constantly on the move, you'll never set down the kind of roots that may really pay dividends in the future, financially or otherwise.

Americans are a notoriously mobile folk. Maybe being forced to stay in one place is a positive?

In The Millionaire Mind, Thomas J. Stanley writes that "millionaires often live in the same house for 20 years or more." It might not be happening the way most people would have liked, but the recession has a lot of us living like the rich and not so famous.

Read Full Story