If you’ve thought about buying a home in recent months, you’ve likely encountered a dismaying landscape: There are tons of buyers in the housing market, but hardly any properties available for sale.
A new report from real-estate brokerage Redfin RDFN, -2.55% sheds light on one factor that’s fueling the national housing-supply crunch. The takeaway: Homeowners across the U.S. aren’t moving as often as they used to.
As of 2021, the typical homeowner has spent 13.2 years in their house, according to the report. That’s up significantly from a decade ago. Back in 2012, the average homeowner tenure was only 10.1 years.
The good news for buyers is that the length of time spent in homes did drop slightly between 2020 and 2021. A year earlier, the average homeowner had been in their home for 13.5 years.
“Homeowner tenure may have already peaked, or the decline in 2021 could be a blip before it climbs back up,” Redfin chief economist Daryl Fairweather said in the report.
The drop in tenure reflects the sheer breadth of the migration shifts that have occurred as a result of the pandemic. Faced with the sudden ability to work from home, many Americans sought to move to larger and cheaper homes in less densely populated parts of the country.
“The migration trend is encouraging for supply because more people moving typically means more people selling their homes,” Fairweather said. “Adding supply will help the housing market keep up with demand and start relieving buyers from heated competition and rapidly rising prices.”
Other trends, though, may counteract the potential benefits of the pandemic-fueled interest in migration. Rising mortgage rates may prompt some families, who would otherwise buy a new home and sell their current one, to stay put. That’s because the higher interest payments might begin to counteract the savings they could see from moving to a cheaper area.
“As of 2019, a third of homeowners were 65 years or older.”
Plus, homeowners on average are getting older — a trend that predates COVID-19. Redfin found that 33% of households nationwide were headed by someone who was 65 years or older in 2019, up from 28% in 2012. Research has suggested more Americans are opting to age in place, rather than sell the family home and relocate to a smaller property or retirement communities.
Redfin’s analysis also showed the impact of local policies on homeowner tenure. Across many cities in California, homeowners stayed in their houses far longer than the national average. The longest tenure rate in the country is found in Los Angeles, where homeowners will live in a property for 18.1 years on average.
In California, property-tax policy rewards families who stay put. The state’s Proposition 13 limits property-tax increases, and those benefits can even be passed down from generation to generation — though recent changes did make the transfer of those benefits more difficult.
Recent changes in property tax policy have made it possible for seniors to transfer their property tax rate to a new property, in a bid to encourage more movement in the real-estate market. But a Redfin agent said in the report that understanding of these property-tax policies may be limited.
“I think more people here would sell their homes if they were aware of the newer laws,” Karen Ulloa, a Redfin agent who works in Southern California, said in the report.