Examining data such as how long most families stay in their homes is more than just an interesting sociological experiment, it also provides valuable information about market conditions and what consumers can expect when buying or selling a home. In fact, some interesting trends have started to develop in recent years, with experts attributing a number of factors to the change.
Exploring Historical Data
According to the National Association of Realtors, the median amount of time families stayed in the same home was exactly six years from 1985 through 2008. After 2008, however, this average changed to nearly nine years, representing a nearly 50 percent increase. In 2016, the number of years families remained in their homes was a solid ten years.
A number of different factors can influence the decision to move. These include moving for the sake of a job or to have room for an expanding family. On the other hand, some choose to as their families become smaller or because they need to be closer to an elderly parent. Yet others may simply want a home that is a different style or they want to move to a different city or state in order to better suit their lifestyle.
Whatever the reason, an increasing number of families seem to be finding reasons to stay put rather than leave. As such, many experts believe there may be a large portion of homeowners living in homes that are not best for their current family circumstances, such as baby boomers living in large, empty houses or young millennial couples living in one-bedroom condos that are not ideal for their upcoming family growth plans.
Understanding the Change
While the concept of couples staying in the same home and raising their families in it for 40 or 50 years is a common romanticized notion, the reality is that this doesn’t frequently happen. Unfortunately, the trend toward staying in homes longer is not likely a reflection of a desire to stay in them for many years, either. Rather, it is more likely that many of these homeowners are ready to move, but the lack of housing inventory remains a major challenge. Alternatively, some would-be empty nesters may not have a reason to downsize as their adult children increasingly choose to remain at home instead.
To gain a better understanding of this, it is helpful to look back at some historical data. During the housing crisis, many homeowners were put into a negative equity situation where their homes were worth less than the mortgage on the property. In addition, the uncertain economy made many homeowners more fiscally conservative about making a move. The latter is the most likely reason why many younger families have chosen not to move, as they still have not caught up to previous generations in terms of frequency of moving.
Looking Toward the Future
Whether or not the frequency of movement will fall back to previous norms remains to be seen. What is certain is that home prices have risen dramatically over the last few years, with around 94 percent of homes now having positive equity. Of these, around 80 percent have at least 20 percent equity. Wages have also started to increase, putting many homeowners in a much better financial situation than they were just a few years ago. Are attitudes toward homeownership just different now or will things soon revert back to how they used to be? Only time will tell.