Prospective buyers in the market for an existing home are finding themselves in an environment where more homeowners are not eager to move out.
The typical U.S. homeowner has spent 11.9 years in their home, up from 6.5 years two decades ago, according to new data from Redfin (NASDAQ:RDFN), which noted the homeowner tenure peaked at 13.4 years in 2020 when the pandemic set off a new wave of relocations. But in the post-pandemic era, things are very different.
Redfin determined that nearly 40% of baby boomers have lived in their home for at least 20 years, and another 16% have lived in their home for 10-19 years. For Gen Xers, more than one-third (35%) have lived in the same home for at least 10 years while less than 7% of millennials have lived in their home for 10 years or longer and 30% have lived in their home for less than five years.
Older Americans are hanging onto their homes because they’re financially incentivized to do so. Most (54%) baby boomers who own homes own them free and clear, with no outstanding mortgage, while those with a mortgage have a much lower rate than they would if they sold and bought a new home with today’s rates. And some state tax systems have policies that make it financially beneficial for people to stay in their homes as they get older – Texas homeowners over 65 can defer property taxes until the home is sold while California’s Proposition 13 limits property-tax increases.
Furthermore, many older Americans prefer aging in their family home rather than moving to a different house or entering an assisted-living facility: Nearly 9 in 10 Americans between 50 and 80 years old said in a recent survey it’s important to stay in their homes as they get older.
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