Tenure of a Home
The National Association of Realtors (NAR) keeps historic data on the median tenure of a family in a home. The graph below shows a dramatic change. For 20+ years (1985-2008), the median number of years in a home averaged 6 years. However, since 2008, that average is almost 9 years – an increase of almost 50%.
- THEN: The drop in home prices during the housing crisis left many homeowners in a negative equity situation. Their homes were worth less than their mortgage on the property.
NOW: With home prices increasing over the past several years, over 90% of home owners who have a mortgage are now in a positive equity situation, with 70% of them having 20% or more in equity.
- THEN: The uncertain economy made homeowners much more fiscally conservative about making a move.
NOW: With the economy coming back and wages increasing, many homeowners are in a much better financial situation than they were just a few years ago.
What does this mean for housing?
Many homeowners may not be living in a house that is best for their current family situation. They could be baby boomers living in an empty, f4-bedroom colonial, or a millennial couple planning to start a family who currently lives in a 1-bedroom condo.
These homeowners are ready to make a move. Since the lack of housing inventory is a major challenge in the current housing market, this could mean the real estate market will remain strong.