Homeowners staying put longer: What it means for the real estate market
National Housing Conference CEO David Dworkin on the impact of potential Federal Reserve interest rate cuts on homeowners and the state of the housing market.
Homeowners in the U.S. are increasingly staying in their current homes and not moving into new ones, limiting the number of homes available to new buyers.
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According to a real estate brokerage firm Redfin, people are staying in their homes for thirteen years before moving on to new ones. That's five more years than was the case in 2010.
ATTENTION HOMEOWNERS: THIS IS THE BEST WEEK TO SELL YOUR HOUSE
"A lot of it has to do with affordability," Redfin’s chief economist Daryl Fairweather told FOX Business. "It can be very challenging – with high real estate fees ... Prices bottomed out in 2012 and have been rising ever since. If you bought at the bottom and have seen prices rise since then, you’re going to be more reluctant [to sell your old home and buy a new home]."
As a result, there are fewer home sales and fewer homes on the market -- and, given the supply and demand, there are subsequently higher prices for homes that do exist on the real estate market.
Fairweather added: "It’s the lowest level of [housing] inventory in five years. Part of that is homes are not turning over as quickly.”
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“In Dallas, there are many neighborhoods that were built in the 1950s and 1960s where most of today’s residents are still the original homeowners,” Dallas Redfin agent Christopher Dillard said. “Because prices have been going up, and folks are gaining more and more equity, it’s hard to justify selling when there aren’t many if any affordable options."