The American homeowner tenure average reached 13.2 years in 2021, a slight decline from 2020’s average of 13.5 years. Has homeowner tenure peaked as more Americans move?
Homeowner tenure is still up by historical standards; it stood at 10.1 years in 2012 for comparison. But after rising steadily for nearly a decade, the 2021 decline is prompting economists to wonder whether that could be a lasting trend.
The lengthening tenure average in recent years occurred because of older homeowners’ growing desires to age in place, a shortage of homes for sale, and relatively low monthly payments due to record-low mortgage rates, according to an analysis from Redfin.
But those rates also prompted more moves last year as historically low rates and the growing ability to work remotely gave Americans more flexibility.
“Homeowner tenure may have already peaked, or the decline in 2021 could be a blip before it climbs back up,” says Daryl Fairweather, Redfin’s chief economist. “There are competing forces at work. Remote work is encouraging homeowners to sell their homes in expensive cities and move to more affordable areas, which could pull tenure down. But on the flip side, rising mortgage rates may discourage people from selling and older Americans are staying put longer, which could push it back up.”
The migration trend is “encouraging for supply because more people moving typically means more people selling their homes,” Fairweather continues. “Adding supply will help the housing market keep up with demand and start relieving buyers from heated competition and rapidly rising prices.”
Where Owners Stay the Longest, Shortest
In Los Angeles, the typical homeowner has spent 18 years in their home as of 2021, according to Redfin’s analysis. That is the longest tenure of the metros analyzed. Honolulu homeowners spent a median of 17 years in their home, as well as in Oxnard, Calif., also among the highest in the nation.
California homeowners overall tend to stay in homes the longest. Housing analysts speculate that could be because of the state’s property tax laws. The state’s Proposition 13 incentivizes homeowners to stay in their homes by limiting property tax increases.
On the other hand, homeowner tenure has declined in several metros over the last year, led by Atlanta (falling to a median of 9.8 years in 2021), Las Vegas (7.7 years), Phoenix (8.3 years), and Tampa, Fla. (9.6 years).