The amount of time the typical homeowner stays in their home has fallen from its 2020 peak, according to a new report released Wednesday by Redfin.
The typical United States homeowner has spent 12.3 years in their home, down from 12.9 years in 2021 and the peak of 13.4 years hit in 2020.
The typical homeowner is still staying in place much longer than in the past though, with the median tenure clocking in at 6.5 years in 2005 and 10 years in 2012.
The overall trend in longer homeowner tenure is being driven by older Americans aging in place at a higher rate, while the modest decline can be attributed to the large number of people who moved during 2021, but tenure is likely to see an uptick again due to a rise in mortgage rates deterring people from moving, according to the report. Approximately 85 percent of American homeowners currently have a mortgage rate less than 6 percent.
“Even though the length of time Americans are staying in their homes has ticked down from the peak it reached in 2020, it’s likely to head back up again in the next few years,” Redfin Senior Economist Sheharyar Bokhari said in a statement. “Today’s mortgage rates are more than double the lows reached during the pandemic homebuying frenzy, which means people have extra incentive to hang onto their homes.”
“Even if rates dip down to 4 percent or 5 percent, that’s still significantly higher than the sub-3 percent rates many homeowners have now,” Bokhari added. “That lock-in effect, combined with older Americans’ desire to stay put in their homes, points to lengthening tenure in the future.”
The rise in the amount of Americans aging in place can be in part attributed to the growing share of eldery Americans. Roughly 17 percent of Americans are aged 65 or older, according to the report, up from 13 percent of the population 2010, and the share is expected to continue increasing.
That combined with 20-year highs for mortgage rates resulting in a lack of affordability and move-up buyers, historically high rental rates motivating some property owners to become landlords rather than sell, and a shortage of homes for sale will all likely result in the continued increase of homeowner tenure, the report argues.
Homeowners in California stay in their homes the longest, especially in the expensive urban areas such as Los Angeles, where they typically stay put for 18.2 years, followed by 17.3 years in San Jose. Cleveland, Ohio rounds out the top three metro areas, with the typical homeowner staying in their home for 17.1 years there.
Homeowners in Louisville, Kentucky have the shortest tenure at 6.9 years, followed by Las Vegas at 7.6 years and Nashville at 8.2 years.