How Long Do Families Stay in a Home?
The National Association of Realtors (NAR) keeps historic
data on many aspects of homeownership. One of the data points that has
changed dramatically is the median tenure of a family in a home. As the
graph below shows, for over twenty years (1985-2008), the median tenure
averaged exactly six years. However, since 2008, that average is almost
nine years – an increase of almost 50%.
And, with the economy coming back and wages starting to increase, many homeowners are in a much better financial situation than they were just a few short years ago.
These homeowners are ready to make a move. Since the lack of housing inventory is a major challenge in the current housing market, this could be great news.
Why the dramatic increase?
The reasons for this change are plentiful. The top two reasons are:- The fall in home prices during the housing crisis left many homeowners in a negative equity situation (where their home was worth less than the mortgage on the property).
- The uncertainty of the economy made some homeowners much more fiscally conservative about making a move.
And, with the economy coming back and wages starting to increase, many homeowners are in a much better financial situation than they were just a few short years ago.
What does this mean for housing?
Many believe that a large portion of homeowners are not in a house that is best for their current family circumstances. They could be baby boomers living in an empty, four-bedroom colonial, or a millennial couple planning to start a family that currently lives in a one-bedroom condo.These homeowners are ready to make a move. Since the lack of housing inventory is a major challenge in the current housing market, this could be great news.
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