The National Association of Realtors (NAR) keeps historic data on many aspects of homeownership. One of the data points that has changed dramatically is the median tenure of a family in a home. As the graph below shows, for over twenty years (1985-2008), the median tenure averaged exactly six years. However, since 2008, that average is almost nine years – an increase of almost 50%.
Why the dramatic increase?
The reasons for this change are plentiful. The top two reasons are:
The fall in home prices during the housing crisis left many homeowners in a negative equity situation (where their home was worth less than the mortgage on the property).
The uncertainty of the economy made some homeowners much more fiscally conservative about making a move.
However, with home prices rising dramatically over the last several years, over 90% of homes with a mortgage are now in a positive equity situation with 70% of them having at least 20% equity.
And, with the economy coming back and wages starting to increase, many homeowners are in a much better financial situation than they were just a few short years ago.
What does this mean for housing?
Many believe that a large portion of homeowners are not in a house that is best for their current family circumstances. They could be baby boomers living in an empty, four-bedroom colonial, or a millennial couple planning to start a family that currently lives 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.
About the Author:John has been a licensed Real Estate Broker and Realtor in the state of Washington since 2003. He's earned many professional designations such as the Certified Residential Specialist, Graduate of the Realtor Institute and the Accredited Buyers Agent. When John isn't assisting buyers, sellers and investors, you'll find he and his wife flying around the Puget Sound taking full advantage of John's private pilot's license. When they're not flying, they're likely hiking, snowshoeing, really just enjoying all the great northwest has to offer!