Time to Move?
Average Time Families Live in Their Home
The National Association of Realtors (NAR) is a great resource for historical data on many aspects of home ownership. One of the data points that has changed dramatically is the median tenure of a family living in a home. For twenty-plus years (1985-2008), the median tenure averaged 6 years. However, since 2008, that average jumped to almost 9 years – an increase of almost 50%!
Why the big increase?
The drop in home values during the housing crisis left many homeowners in a negative equity position – sometimes called ‘upside-down’ or ‘under water’. Basically, this means their home was worth less than the mortgage on the house. Also, the uncertainty of the economy made some homeowners more fiscally conservative about making a move.
With home prices rising dramatically over the last several years, 93.7% of homes with a mortgage are now in a positive equity situation. 79.1% of homes have at least 20% equity, according to CoreLogic.
With the economy and consumer confidence coming back, many homeowners are in a better financial situation than they were just a few short years ago.
Another reason for the increase is due to the fact that historically, young homeowners who were either looking for more space or a better school district were more likely to move every 5 years. The home ownership rate among young families, however, has still not caught up to previous generations, resulting in the jump in median tenure.
What does this mean for housing?
Many experts feel a large number of homeowners are not in a house best suited for their current family circumstances. They could be baby boomers living in an empty, four-bedroom home, or a millennial couple planning to start a family who currently live in a one-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 be great news for sellers.