How long do homeowners stay in their homes?

Owners typically stay fewer years in their homes in metro areas with a high concentration of new residents, a NAR analysis shows.

As of 2018, the median duration of homeownership in the U.S. is 13 years1. Compared to previous years, homeowners opt to spend more time holding onto their residences. Median tenure has increased by 3 years since 2008.

Nevertheless, homeownership duration varies from area to area. Homeowners in some metro areas move more frequently than homeowners in the rest of the country. To begin our analysis, we looked at the median years of residence for owner-occupied homes located in the 100 largest U.S. metro areas. The American Community Survey provides estimates about the median year that owners moved into their homes. As data shows, homeownership duration varies from 6 to 18 years in the 100 largest metro areas. In more than half of these metro areas, homeowners spend less time holding onto their primary residences than the typical homeowner across the country. 

Specifically, homeowners in the following areas typically stay up to 8 years in their homes:

Map of the US: Where Owners Spend Less Time Holding onto Their Homes

In contrast, the following metro areas had a median homeownership duration of 16 years and higher:

Map of the US: Where Owners Stay Longer in Their Homes

As the data shows, many of the fastest-growing metro areas had the lowest median tenures. For instance, in Austin-Round Rock, TX, owners typically stay for 8 years in their homes while 18 percent of the total population moved within the last 12 months in 2018. Respectively, in Colorado Springs, CO the median homeownership duration was 8 years while the share of recent movers was 21 percent.

In contrast, in New York-Newark-Jersey City, NY-NJ-PA where fewer people moved recently (9%), the typical homeowner stayed for 15 years. Similarly, the median homeownership duration was 15 years in Los Angeles-Long Beach-Anaheim, CA while 9 percent of the total population moved within the last 12 months.

Housing supply shortage and low affordability are two of the main reasons that people stay longer in their homes. Firstly, the number of building permits for single-family homes issued in 2018 compared to a year earlier was lower in the metro areas with median homeownership duration above 13 years. While there are fewer inventory options, sellers in these areas may find it harder to find and purchase their next homes. Thus, they stay longer in their homes and fewer homes are available for first-time homebuyers. On the contrary, permits increased by 4% in the metro areas where homeowners stay less than 13 years in their homes.

Moreover, housing is more expensive in the areas with the highest median tenures. Although short supply increases the seller’s profit, it also difficult for these sellers to afford to purchase their next homes. As data reveals, the median home price of recently purchased homes was 10 percent higher in the areas with a median homeownership duration above 13 years compared to other metro areas.

Homeowners staying longer in their homes can further reduce the number of homes for sale. Homeowners will likely be further locked in place because it is difficult to sell and buy a home at the same time. That being said, finding ways to build more housing will help, but the ultimate goal is to increase the number of existing homes available on the market. This can only happen if these existing owners’ homes go on the market.

However, metro areas with smaller homeownership duration are expected to have a boost of housing activity in the upcoming years. Since these areas have more homes available for first-time homebuyers than other metro areas, more newcomers will likely arrive. As first-time homebuyers become a greater proportion of all homeowners, the median homeownership duration will fall further in these areas.

Hover over the map to see how long owners of different metro areas opt to stay in their homes.

  • In green metro areas, homeowners spend less time holding onto their residences compared to nationwide
  • In grey metro areas, homeowners spend 13 years
  • In orange metro areas, homeowners spend more time holding onto their residences compared to nationwide

Homes Are Selling Quickly

  • The National Association of REALTORS® surveyed their members for the release of their Confidence Index.
  • The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners. Practitioners are asked about their expectations for home sales, prices, and market conditions.
  • Homes across the country are selling quickly, in an average of just 31 days.
  • 49% of homes sold in less than a month.

4 Reasons to Sell Your Home This Fall

  • Buyers are active in the market and often competing with one another for available listings.
  • Housing inventory is still under the 6-month supply found in a normal housing market.
  • Homes are still selling relatively quickly, averaging 31 days on the market.

Why is the United States Homeownership Rate Stuck at 1965 Levels?

The Housing Shortage in Perspective

Why inventory has been shrinking.

Existing Home Sales Point Toward a Good Time to Sell

  • Existing Home Sales dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June.
  • Low inventory levels are still a factor in the market. The current supply of homes for sale is at 4.4 months, which is less than the optimal 6-month supply.
  • Median home prices were up 4.3% from June 2018, hitting $285,700. This marked the 88thconsecutive month with year-over-year price gains.

Why Home Sales Are Falling Against a Strong Economy

Despite mortgage rates dipping below 4%, more jobs filled than ever before, and record-high consumer net worth, existing-home sales turned south in June, running at a pace similar to 2015 levels, the National Association of REALTORS® reported Tuesday. While economic indicators portend a strong housing market, low supply on the lower end—which leaves first-time homebuyers with few options—is helping to hold sales back, NAR Chief Economist Lawrence Yun says.

Total existing-home sales, comprising transactions for single-family homes, townhomes, condos, and co-ops, dropped 1.7% month over month in June to a seasonally adjusted annual rate of 5.27 million, according to NAR. Sales are down 2.2% from a year ago. Two of the four major U.S. regions, the Northeast and Midwest, recorded minor sales increases last month, while the South and West posted larger declines. “Imbalance persists for mid- to lower-priced homes, with solid demand and insufficient supply, which is consequently pushing up home prices,” Yun says.

The median existing-home price for all housing types reached a record high of $285,700 in June, up 4.3% from a year ago.

Yun says other factors besides high home prices and inventory shortages may also make buyers skittish. “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure,” Yun says. “It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive.”

Here’s a closer look at more key indicators in the housing market in June from NAR’s latest report:

  • Inventory: Total housing inventory rose to 1.93 million in June, up from 1.91 million in May. But the June figure is unchanged from inventory levels a year ago. Unsold inventory is at a 4.4-month supply at the current sales pace.
  • Days on the market: Fifty-six percent of homes sold in June were on the market for less than a month. Properties typically remained on the market for 27 days in June, up slightly from 26 days a year ago.
  • Mortgage rates: The 30-year fixed-rate mortgage dropped to 3.80% in June, down from 4.07% in May, according to Freddie Mac. “Historically, these rates are incredibly attractive,” says NAR President John Smaby. “Securing and locking in a mortgage now—given the current favorable conditions—is a decision that will pay off for years to come.”
  • First-time buyers: First-time buyers comprised 35% of sales in June, up from 31% a year ago.
  • All-cash sales: Sixteen percent of transactions in June were paid in cash, down from 22% a year ago. Individual investors, who account for the bulk of cash sales, purchased 10% of homes in June, down from 13% a year ago.

Home Prices Up 5.73% Across the Country

Some Highlights:

  • The Federal Housing Finance Agency (FHFA) recently released their latest Quarterly Home Price Index report.
  • In the report, home prices are compared both regionally and by state.
  • Based on the latest numbers, if you plan on relocating to another state, waiting to move may end up costing you more.

What is the Cost of Waiting Until Next Year to Buy?

  • The cost of waiting to buy is defined as the additional funds it would take to buy a home if prices & interest rates were to increase over a period of time.
  • Freddie Mac predicts interest rates to rise to 5.1% by the end of 2019.
  • CoreLogic predicts home prices to appreciate by 4.8% over the next 12 months.
  • If you are ready and willing to buy your dream home, find out if you are able to. Contact me: emmanuel@EmmanuelFonte.com