Prior to the Great Recession and home-price crash, the typical length of ownership had been fairly stable, but after 2008 the length of time that owners have kept their home lengthened. And the trend is consistent whether looking at how long recent sellers had owned their home, or looking at how long current homeowners have been in their home.
Using public records data, CoreLogic found that the median number of years that home sellers had owned their home increased by three years between 2007 and 2013, and has increased an additional year for each year since then to 10 years between sales. Likewise, government survey data for all homeowners shows a similar lengthening of ownership period after 2007.
However, the annual National Association of Realtors’ Profile of Home Buyers and Sellers tracked a similar increase in the average time period sellers owned their home before selling the time period before owners sold, but the most recent NAR survey suggests that the period of ownership peaked in 2014 year and is now declining as the housing recovery takes hold.
At the height of the boom, from 2004 to 2006, NAR’s survey found that sellers were moving after only six years, but that increased to seven years by 2009 as plummeting values made it harder for owners with a mortgage to sell. By 2011, owners were staying in their homes an average of nine years, a 50 percent increase over the boom years. In 2014, home tenancy peaked at 10 years. Last year, for the first time in nearly a decade, owners started selling sooner and the typical seller was moving after only nine years. The next Profile is scheduled to be released in November.
Labor market, housing and demographic trends are some of the reasons why homeowners have chosen to keep their homes longer. Recent labor market research indicates that the severity and broad geographic impact of the Great Recession may have discouraged workers from relocating. In addition, there has been a gradual, secular decline in worker mobility, perhaps related to advances in communication and office technology. Further, the substantial drop in home values during the housing crash may have posed a significant financial disincentive for owners who may otherwise had planned to sell and move either because the value loss had eliminated all their housing wealth or because their adult children had moved back to the family house. And demographics are at work too. A large segment of the Baby Boom cohort is in their 50s – most are still working, have put down roots in their communities and are less willing to relocate at this point of their life cycle, said Frank Nothaft, CoreLogic’s chief economist.
A comparison of the length of owning a home in the United States with other countries shows more similarity than differences. CoreLogic public records data for Australia and New Zealand show a similar length of ownership for recent sellers compared with the U.S. Survey data for the United Kingdom and Canada also show the typical length of ownership is close to a decade. Despite differences in national housing markets, transaction costs in trading homes are leading homeowners to keep their homes for many years.