U.S. homeowners’ decision to stay in their homes longer is keeping much-needed inventory off the real estate market, causing a slip in home sales.
New analysis by Redfin found that homeowners around the country are typically staying in their homes for 13 years, five years longer than they did in 2010.
“If people aren’t moving on, there just are fewer and fewer homes available for new home buyers,” said Daryl Fairweather, Redfin’s chief economist.
Housing inventory has fallen to its lowest level in 37 years, with homeowners staying the longest in Salt Lake City, Houston, Fort Worth, San Antonio and Dallas, more than eight years longer than they did in 2010.
“In Dallas, there are many neighborhoods that were built in the 1950s and 1960s where most of today’s residents are still the original homeowners,” said Dallas Redfin agent Christopher Dillard. “Because prices have been going up, and folks are gaining more and more equity, it’s hard to justify selling when there aren’t many if any affordable options.
Aging baby boomers who are staying healthier as they get older and choosing not to downsize are a key factor in the falling inventory. In fact, many local governments have implemented policies that reduce property tax burdens for senior citizens, making it more affordable for them to stay in their homes longer. Homeowners age 67 to 85 are remaining homeowners longer causing a shortage of 1.6 million homes, according to a report by Freddie Mac.
The predicament has reduced the number of homes for sale, making for a more competitive market for buyers. In Salt Lake City, where the median home tenure is the highest, the number of homes for sale has declined 59 percent from 2010 to 2019.
“I have a client right now in West Valley who wants to move into the city in a more walkable, higher-priced neighborhood,” said Salt Lake City Redfin agent Daniel Lopez. “They would need to sell to buy, but are worried about making a competitive offer when they still need to sell their current home. I rarely see offers with home sale contingencies accepted in Salt Lake City because the market is competitive.”