Homeowners Quicker to Sell and Move in 2021
Study: The average owner moved after 13.2 years in 2021, down from 13.5 in 2020. The reason? Remote work opportunities, low interest rates and rising home prices.
SEATTLE – In 2021, the typical American homeowner had been in their home for 13.2 years, according to a report from Redfin. That’s a long time historically but down slightly from a peak of 13.5 years in 2020. In 2012, homeowner tenure average 10.1 years.
Homeowner tenure flattened last year partly because many Americans moved during the pandemic due to record-low mortgage rates, and a pandemic-fueled drive for remote work that often pushed people to less expensive metro areas.
Still, few experts foresee a big drop in home longevity, at least in the short term, because the baby boomer generation is aging and hitting a time when many owners hope to stay in their current home and “age in place.” One-third (33%) of U.S. household heads were at least 65 years old in 2019, up from 28% in 2012 – a share expected to increase substantially in the next few decades.
Another trend working against home sales: Interest rates. As they start to rise, many current homeowners with a mortgage have a disincentive to sell. If they trade a current mortgage for a new mortgage, they’ll likely be trading a record-low interest rate on their current loan for a higher rate in a new one, especially if the Federal Reserve follows through with expected rate increases.
One additional challenge also keeps current homeowners from selling: The fear of finding somewhere else to live. Most sellers must find and successfully close on another home, and the historical lack of inventory likely makes many people settle for what they have in hand.
“Homeowner tenure may have already peaked, or the decline in 2021 could be a blip before it climbs back up,” says Redfin Chief Economist Daryl Fairweather. “There are competing forces at work. Remote work is encouraging homeowners to sell their homes in expensive cities and move to more affordable areas, which could pull tenure down. But on the flip side, rising mortgage rates may discourage people from selling and older Americans are staying put longer, which could push it back up.”
California tends to have the most long-staying homeowners, thanks in part to the state’s unique property tax laws. California’s Proposition 13 incentivizes homeowners to hang onto their homes because it limits property-tax increases.
Homeowner tenure declined over the last decade in 15 metros, several of which are popular migration destinations. Median tenure declined by about one year in Atlanta, Las Vegas, Phoenix and Tampa – all places that attract a lot of new residents.
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