What is the average amount of time most families stay in their homes? The National Association of Realtors keeps historical data on many aspects of this and ties to home-ownership. One of the data points that has changed dramatically is the median tenure of a family in a home. This means how long a family stays in a home prior to moving. For over twenty years (1985-2008), the median tenure averaged exactly six years. However, since 2008, that average is almost nine years. This is an increase of almost 50%.
Why the dramatic increase? The reasons for this change are plentiful!
The fall in home prices during the housing crisis left many homeowners in a negative equity situation. This meant their home was worth less than the mortgage on the property. Also, the uncertainty of the economy made some homeowners much more fiscally conservative about moving.
With home prices rising dramatically over the last several years, 93.9% of homes with a mortgage are now in a positive equity situation. About 78.8% of them have at least 20% equity, according to CoreLogic. With the economy coming back and wages starting to increase, many homeowners are in a much better financial situation. This has been seen over a short period of just a few years.
One other reason for the increase was brought to light by NAR in their 2017 Home Buyer and Seller Generational Trends Report. According to the report: “Sellers 36 years and younger stayed in their home for six years.” The homeowners are looking for more space to accommodate their growing families are more likely to move. This is compared to 10 years for typical sellers in 2016. The home-ownership rate among young families, however, has still not caught up to previous generations. This is resulting in the jump we have seen in median tenure!
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 circumstance. They could be baby boomers living in an empty colonial, or a millennial couple living in a one-bedroom condo. These homeowners are ready to make a move. Since a lack of housing inventory is still a major challenge in the current housing market, this is great news.
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