Homeowner tenure, the average amount of time homeowners live in their home, has increased dramatically over the last ten years. In 2008 and during the recession, people began staying in their homes longer. Prior to the housing crisis, that tenure was about five years. It increased to seven years between 2008 and 2016. In the last two years, partially owing to the inventory crisis and rising interest rates, according to a new study by First American, home tenure has grown to an amazing ten years.
Although it may not seem like much of a change, this trend has shifted quickly and it has big implications for our inventory issues. Why are people staying in their homes longer?
· Mortgage rates– Years of low interest rates have homeowners not wanting to trade in their historically-low mortgage rate for today’s rates.
· Lack of supply – Homeowners not wanting to compete for the lack of homes in the market, worsen the problem by staying in their homes.
· Tighter Credit Standards– Credit is not as lenient as it has been, and some homeowners may be concerned about qualifying for a new mortgage under these tougher lending standards.
Per the National Association of REALTORS®2018 Profile of Home Buyers and Sellers, buyers who bought a home last year expected to be in the home 15 years. According to the same study, theactualtenure in the home reported by homesellers was reported as follows:
The above information indicates that 44% of last year’s homesellers were in their homes for 11 years or longer. Only 36% were in their homes five years or fewer.