Even though it’s more than a decade past the last recession, there is one trend that has continued: homeowners are staying longer in their homes. With the down market in 2008, many people chose to make smaller investments in their property rather than move to a bigger home. Fast forward to 2019, and across the country homeowners are staying in their homes an average of 13 years - up five years since 2010. In the Boston area, that number jumps to nearly 18 years.
There are a few reasons why Americans across the country are holding onto their homes for longer. Rather than move to a new home, some owners have found it makes more financial sense for them to renovate or even demolish and completely rebuild their current properties. This could be for tax reasons, or simply that their current budget does not cover the amount of house that they need.
Secondly, Americans are living longer and healthier, which means the number of years they have in their own homes have increased. Many older Americans don’t feel the pressure to downsize just yet, so they are staying put and instead renovating their homes to fit their lifestyles. In some states, tax incentives make it even easier for people to stay in their current homes.
So what does this mean for the market? For starters, it means less supply for first-time homebuyers and younger families looking to expand. Neighborhoods are skewing older, with less turnover in owners, and therefore less opportunity for younger people. When the housing supply is low and the demand stays consistent - as it is now - this means higher home prices (which is great news for sellers) and lower mortgage rates (which is great news for buyers). To entice the market, mortgage rates will drop, making it an ideal situation for a buyer if they are able to secure a home in a low supply market. It also means it’s an optimal time to list your property if you’ve been waiting for an extra incentive to sell. You can expect heavy demand and quick offers at asking price on your home.
In the long-term, the market can also expect a shift. Just because people are staying in their homes longer now, doesn’t mean they’ll stay forever. This is delaying the wave of people downsizing their homes, so we can expect a seller-heavy period in a few years, with higher mortgage rates and much more supply for the demand.
If you’re thinking about listing your property or finding for your dream home, contact us for more information on how we can help you start the process. We would love to work with you!