Older Americans are choosing to age in their current homes, driving average tenure up to more than a decade and keeping inventory tight for buyers.
The typical homeowner spent 11.9 years in their current home, nearly double the 6.5-year average of two decades ago, according to a new report from Redfin.
This isn’t the longest on record – tenure peaked at 13.4 years in 2020 and declined during the pandemic buying boom. But it remains high, especially at a moment when inventory is difficult to come by.
The report attributes the data to Baby Boomers remaining in their homes late in life. Nearly 40% of this demographic have lived in their home for at least 20 years. An additional 16% have been in the same place for more than a decade.
Other generations are also sticking to one home, with more than a third of Gen X homeowners spending a decade or more in the same place. Millennials are more likely to move due to their age and tendency to switch jobs at a higher rate.
Boomers and Xers have a greater impact on the state of the housing market because they are more likely to have homes. Just over half of Millennials are homeowners, compared to 80% of Boomers.
Boomers also own many of the nation’s largest homes, creating competition for young families looking to move up the housing ladder. Empty nesters have little incentive to move with rates creeping back towards 7%, but their hold on big houses ripples down to Millennial buyers who want to expand their families and don’t have the space.
Living together is one possible solution to stock shortages and historically low affordability. Talk of ADUs has increased in recent years, and 61% of homeowners cited multigenerational housing as their primary motivation for constructing an accessory dwelling unit.
When asked what can be done to encourage homeownership for Millennials, Kelly Snider, a professor in the Department of Urban and Regional Planning, suggested that Fannie Mae and Freddie Mac make long-term, low-interest loans for accessory dwelling units available. She said older homeowners can move into these units while the main house is sold to younger family members to raise the next generation.
“Adding infill and missing middle housing on existing residential lots is definitely the cheapest, fastest, and most desirable way to create more low-cost housing for young families,” Snider said.
Read More Articles:
Are You Ready To Fall In Love With A Home?
Investors Are Back, Buying 26% Of America’s Most Affordable Homes
Will Profits Continue To Drop For Sellers?
Listen To Our Podcast:
Sign up for our free newsletter.