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LATEST CORELOGIC ECON TWEETS

U.S. Economic Outlook: August 2016

Americans Are Keeping Their Homes Longer - Home Sellers in 2015 Had Owned Their Homes for 10 years

Frank Nothaft    |    Videos

 

Buying a home is an important decision and one that incurs large transaction costs – financing charges, moving expenses, recordation and settlement fees are just some of the costs. Because of these, buyers generally plan to own their home for many years.

Prior to the Great Recession and home-price crash, the typical length of ownership had been fairly stable, but after 2008 the length of time that owners have kept their home has lengthened. And the trend is consistent whether looking at how long recent sellers had owned their home, or looking at how long current homeowners have been in their home.

Using public records data, CoreLogic found that the median number of years that home sellers had owned their home increased by three years between 2007 and 2013, and has increased an additional year for each year since then to 10 years between sales (Figure 1). Likewise, government survey data for all homeowners shows a similar lengthening of ownership period after 2007.

owners are keeping their homes longer

owners are keeping their homes longer

Labor market, housing and demographic trends are some of the reasons why homeowners have chosen to keep their homes longer. Recent labor market research indicates that the severity and broad geographic impact of the Great Recession may have discouraged workers from relocating.[1] In addition, there has been a gradual, secular decline in worker mobility, perhaps related to advances in communication and office technology. Further, the substantial drop in home values during the housing crash may have posed a significant financial disincentive for owners who may otherwise had planned to sell and move either because the value loss had eliminated all their housing wealth or because their adult children had moved back to the family house. And demographics are at work too. A large segment of the Baby Boom cohort is in their 50s – most are still working, have put down roots in their communities and are less willing to relocate at this part of their life cycle.[2]

A comparison of the length of owning a home in the United States with other countries shows more similarity than differences. CoreLogic public records data for Australia and New Zealand show a similar length of ownership for recent sellers compared with the U.S. (Figure 2). Survey data for the United Kingdom and Canada also show the typical length of ownership is close to a decade. Despite differences in national housing markets, transaction costs in trading homes are leading homeowners to keep their homes for many years.

length of time owning a home

length of time owning a home

Note: Tim Lawless, Research Director for CoreLogic International, provided data for Australia and New Zealand. Hites Ahir of the International Monetary Fund assisted with data for Canada and the United Kingdom. Kristine Yao conducted the analysis of U.S. data.

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