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Home > Homeownership Tenure at Highest Level in 18 Years

Homeownership Tenure at Highest Level in 18 Years

January 15, 2019 by Admin Leave a Comment

Homeownership Tenure at Highest Level in 18 Years

January 14, 2019

Since 2008, in the aftermath of the last housing crisis, homeowners have stayed put longer in their homes. But now more than a decade out from the crisis, that trend is only deepening, according to a new study released by First American Bank. “[Homeownership] tenure jumped to seven years during the aftermath of the crash between 2008 and 2016, and the most recent data from December 2018 shows that the median length of time someone lives in their home has increased 10 percent compared to a year ago,” says First American Chief Economist Mark Fleming.

Portrait of happy family in garden of their home

© Westend61/Getty Images

Over the past few months, rising interest rates, low inventory, low foreclosure rates, and tight credit have all increased homeownership tenure to its highest level in 18 years, Fleming says. For homeowners who have a low interest rate, they may be less inclined to want to move, he adds. “The lower the interest rate homeowners have on their existing mortgage compared to the current market mortgage rate, the less incentive there is for homeowners to move, leading to higher tenure length. Why move when it will cost more each month to borrow the same amount from the bank?”

Homeowners who purchased their home about a decade ago are likely to have a mortgage rate around 3.5 percent. The average 30-year fixed-rate mortgage today is 4.6 percent and, therefore, may appear “unattractive” for moving, Fleming notes.

As homeowners delay their plans to move, buyers are finding fewer options on the market. But that could soon change. “While it is unlikely the influences that are currently driving tenure higher will change in the near term, more than half of all existing homes are owned by baby boomers and the silent generation, who will eventually age out of homeownership,” Fleming says. “When that occurs, the problem may not be a lack of supply—but the exact opposite.”

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Mark Trafton IV Broker/Owner

Mark has been a member of the Armor Realty family since September 2006. The company’s founder, Paul Armor brought Mark on board to be the Managing Broker and on January 1, 2010, Mark bought the company and became Broker/Owner.  He was licensed in 2002 and has subsequently earned the National Association of Realtors’ CRB designation (Certified Real Estate Brokerage Manager), CRS designation (Certified Residential Specialist), GRI designation (Graduate Real Estate Institute) and the SFR (Short Sale Foreclosure Resource) Certification. Mark has served the Tallahassee Board of Realtors in numerous capacities including Treasurer (2017 – 2018), Secretary (2009); Governmental Affairs Chairman (2005-2007); and Director 2007, 2008, 2010, and 2011.

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