From 1985 – 2008, a period of more than 20 years, the median period of owning the same home averaged exactly 6 years. Since then, that average has increased to almost 9 years. This is an increase of almost 50%.
This is data that the National Association of Realtors tracks.
What Is Causing This Change?
Prior to 2008, home values were soaring, and the economy was good. Homeowners were moving up into bigger, more expensive homes. This was fueled by the fact that the young individuals and couples had good earnings and mortgage money was cheap and plentiful. They purchased their first homes, or they moved up to bigger homes to make room for their growing families. This allowed established home owners the opportunity to move up. But then the housing crisis put many home owners into negative equity situations. Due to falling prices their property values were less than the mortgage amount. Many homeowners began to think more conservatively about making a move. But since 2008 home prices have risen dramatically. Homes with a positive equity value are more than 93%, and over 79% of homes have at least 20% in equity. Many homeowners are now in a better financial situation than before. But the rate of young family’s home ownership still isn’t at the same rate as previous generations. This is why causes the median term of homeownership is longer.
What Effect Does This Have On Housing?
Many home owners currently live in homes that are not appropriate for them. Many millennial couples who are planning a family are living a condo. Many children have grown and moved out to their own homes, leaving baby boomers in their big colonial homes. People are primed to move. The low housing inventory makes this great news.