U.S. Homeowners Staying in Place, Creating Inventory Shortage
New York, NY, November 4, 2019-U.S. homeowners are staying in their homes longer, creating an inventory shortage and impacting home sale rates and pricing, reports the Wall Street Journal.
“Homeowners nationwide are remaining in their homes typically 13 years, five years longer than they did in 2010, according to a new analysis by real-estate brokerage Redfin. When owners don’t trade up to a larger home for a growing family or downsize when children leave, it plugs up the market for buyers coming behind them.
“’If people aren’t moving on, there just are fewer and fewer homes available for new home buyers,’ said Daryl Fairweather, Redfin’s chief economist.
“More homeowners staying put has helped cause housing inventory to dwindle to its lowest level in decades, which has also helped push up prices on homes for sale. Adjusted for population, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping, according to housing-data firm CoreLogic Inc.
“Fewer homes for sale is a big reason why even ultralow mortgage rates, record levels of home equity and a strong job market haven’t jump-started the sluggish housing market.
“Economists say aging baby boomers are the biggest culprits because many are staying healthier later in life and choosing not to downsize. Some look around at the lack of smaller, less expensive homes and are loath to get into bidding wars with their children’s generation to get one.
“States, such as California and Texas, have also implemented tax policies that make it easier for older residents to remain in place.”