Why Aren’t Homeowners Selling? Lots of Good Reasons
Source: Wall Street Journal (01/21/21) Friedman, Nicole
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In 2010, owners stayed for 8.7 years; in 2020, it was 13 years. Pandemic worries, fear of a competitive market and ultra-low loan rates convinced many to hunker down.
NEW YORK – Housing market inventory remains tight as homeowners hold onto their homes longer.
The typical homeowner in 2020 had remained in place for 13 years, up slightly from 12.8 years in 2019 – but well ahead of 2010’s reading of 8.7 years, according to an analysis by Redfin.
About 1 in 4 U.S. homeowners has lived in the same home for more than 20 years, the study found. Still, even with the pandemic, home sales soared in 2020, reaching their highest level in 14 years.
However, homeowners who decided not to sell did so because of pandemic concerns and concerns about finding a new house in a competitive market. Many also enjoyed ultralow interest rates after a refinance on their current home that made it more advantageous to stay put.
A drop in sellers as owners stay in a current home longer, however, tightens the real estate markets.
The 1.28 million homes for sale at the end of November was down 22% from November 2019, according to the National Association of Realtors® (NAR), and inventory sits near its lowest level in decades. At the current sales pace, there was a record-low 2.3-months’ supply of homes on the market at the end of November.
The market’s home shortage and low borrowing rates have pushed up prices and increased buyer competition, with the median existing-home price last year topping $300,000 for the first time. In November, it stood at $310,800, up 15% from a year earlier, NAR says.
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