American homeowner tenure is in decline as more people up and move to different parts of the country.
No doubt driven by the so-called “Great Resignation” that has seen many people quit their jobs, and also remote work trends, U.S. homeowner tenure fell to 13.2 years in 2021, down from 13.5 years in 2020.
That followed almost a decade of sequential rises in homeowner tenure, prompting economists to wonder if last year was the peak and that a multi-year decline is on the cards.
Experts told Redfin that the lengthening tenure of homeowners in recent years was driven by the desire of older residents to age in place. Other factors such as a shortage of homes for sale and relatively low mortgage payments also played a role, Redfin said.
However, the low mortgage rates were one of the main factors prompting others to move last year, as they hit historic lows. Combined with the ability to work remotely, it suddenly meant millions of people had the flexibility to sell up and move to more affordable areas.
“Homeowner tenure may have already peaked, or the decline in 2021 could be a blip before it climbs back up,” said Daryl Fairweather, Redfin’s chief economist. “There are competing forces at work. Remote work is encouraging homeowners to sell their homes in expensive cities and move to more affordable areas, which could pull tenure down. But on the flip side, rising mortgage rates may discourage people from selling and older Americans are staying put longer, which could push it back up.”
The good news is that these migration trends are encouraging for housing supply, because the more people who move means the more homes for sale there will be, Fairweather added.
“Adding supply will help the housing market keep up with demand and start relieving buyers from heated competition and rapidly rising prices,” she said.
Redfin’s study found that the longest homeowner tenure is in Los Angeles, where residents spend an average of 18 years in their homes, as of 2021. Other long-tenure cities include Honolulu, with a median tenure of 17 years in a home, followed by Oxnard, Calif.,, at just under 17 years.
Californian cities dominate the longest tenure rankings. Redfin said this might be because of property tax laws in the state. California’s Proposition 13 gives homeowners an incentive to remain by limiting property tax increases, Redfin explained.
On the other hand, homeowner tenure has declined in several metros over the last year, led by Atlanta (falling to a median of 9.8 years in 2021), Las Vegas (7.7 years), Phoenix (8.3 years), and Tampa, Fla. (9.6 years).