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Americans are holding onto their homes for longer, and this is costing anyone who wants to buy a home.
The length of stay for homeowners in the US has steadily increased, a major reason that the stock of homes for sale is at record levels and prices are close to the historic high.
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The typical owner in 2020 stayed at the site for 13 years, slightly above 12.8 years in 2019 and well ahead of the 2010 reading of 8.7 years, according to a new analysis by real estate broker Redfin Corp. lived in the same house for more than 20 years, the study showed.
Home sales skyrocketed last year, reaching their highest level in 14 years, as the coronavirus pandemic caused many Americans to look for a bigger home where they could work remotely more easily. That was one of the reasons why the average duration of home ownership stabilized in the past year.
But concerns about Covid-19 had the opposite effect among potential sellers. Fear of strangers entering their homes during the pandemic has prompted some to cancel or delay their plans to list their homes, real estate agents say.
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Those considering selling are also reluctant to act for other reasons, from concerns about finding a new home in a competitive market to ultra-low interest rates that make refinancing and staying put attractive.
Single family homes are seen in this aerial photograph taken from a Lennar Corp. development. in San Diego, California, on September 1, 2020. (Bing Guan / Bloomberg via Getty Images)
Homeowners who stay in their homes longer are contributing to the worsening housing shortage on the market. The 1.28 million homes for sale at the end of November fell 22% from November 2019, according to the National Association of Realtors, and the stock is close to its lowest level in decades. At the current pace of sales, there was a record 2.3-month supply of homes on the market at the end of November.
The scarcity of homes for sale and near-record lending rates are driving up prices and spurring competition among buyers. The average price of an existing home last year exceeded $ 300,000 for the first time. In November, it was at $ 310,800, an increase of 15% over the previous year, NAR said.
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“We are in a really huge supply crisis,” said Daryl Fairweather, chief economist at Redfin. “It becomes a cycle in which people do not want to move because it is very difficult to buy a home and that, in turn, makes it even more difficult to buy a home because people are not moving and releasing stock.”
Brock and Natalyia Rutherford have considered moving in recent years to a more convenient location in their home town of Fort Worth, Texas, but have been unable to find what they wanted in their price range. They refinanced the mortgage this month and plan to renovate the current home instead of moving.
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“We can turn this into any home we want, without having to pay more,” said Rutherford.
Home ownership increased in 2020 compared to 2019 in most major metropolitan areas in the country, according to Redfin. In some major markets, including Charlotte, NC and Sacramento, California, property ownership has dropped slightly in the past year.
With many baby boomers getting healthier later in life, a large number prefer to stay in the same house. Dean and Barbara Cotter, who own a six-bedroom home near Salt Lake City, last year decided to refinance instead of reducing it to a retirement community. They postponed their plans to retire.
“We feel like we want to keep ourselves busy,” said Cotter, 74, who works as a real estate broker. “From a financial point of view, it doesn’t make sense to change.”