Around 25% of American homeowners have lived in their homes for 20 years or more, and the trend could be contributing to the shortage in housing inventory, experts say.
Redfin said its latest study shows there are now more U.S. homeowners with a 20+ year tenure of living in their homes than ever before, and that this is being accelerated by the trend of aging in place. Moreover, the average homeowner has now lived in their home for 13 years, up from just 8.7 years a decade ago, Redfin’s study found.
With Americans staying in their homes for much longer than before, this has contributed to a logjam in available housing inventory. Redfin noted National Association of Realtors’ data from last week that shows inventory across the U.S. fell 23% in December compared to the same month one year ago to an all-time low of just 1.9 month’s supply at the current sales pace.
“It will take vigorous new-home construction in 2021 and in 2022 to adequately furnish the market to properly meet the demand,” NAR Chief Economist Lawrence Yun said in a statement last week.
As well as the stay in place trend, experts say that the COVID-19 pandemic has also sidelined may would-be home sellers as they’re scared of getting infected by allowing people to tour their homes. In addition, potential sellers are worried that if they do sell up, they won’t be able to find a new home very easily. The tight inventory across the U.S. is pushing up home prices. A median existing home now costs $309,800, up almost 13% compared to one year ago, the NAR’s data shows.
Redfin’s chief economist Daryl Fairweather told the Wall Street Journal that housing was in the middle of a “really huge” supply crunch. “It becomes a cycle where people don’t want to move because it’s so difficult to buy a home, and then that, in turn, makes it even more difficult to buy a home because people aren’t moving and freeing up inventory,” he said.