One Key Metric That Is Making the Housing Market Tighter
March 7, 2022
The housing market in the U.S. has seen record-breaking price growth and fierce bidding wars as prospective buyers compete over a historically low number of available houses. A new report from real estate company Redfin sheds light on one of the major factors contributing to the limited supply, namely that homeowners are staying in their homes longer than they used to.
According to the report, as of 2021, the typical homeowner spends 13.2 years in their home. That is a significant increase from a decade ago. In 2012, the average homeowner stayed in their home for just 10.1 years.
Homeowner tenure did drop slightly in 2021, down from 13.5 years in 2020, but that is likely a product of the pandemic-driven shift to working from home, which allowed buyers to look for larger properties farther from the office. With mortgage rates climbing, tenure is likely to increase as homeowners stay with their current low-interest rate mortgage rather than look for a new home financed at a higher rate.
The report also found that homeowners on average are getting older. As of 2019, 33% of homes were headed by someone over the age of 65, up from 28% in 2012. More Americans are opting to “age in place” during their retirement, staying in their current home rather than downsize to a smaller home or relocate to a retirement community.