May 2021

More homeowners on the move could help with the housing shortage

Years in home2018-2019 percent moving2019-2020 percent movingYear-over-year change
Total 1+4.86%5.48%0.61%
1 to 47.69%9.35%1.66%
5 to 95.24%6.64%1.39%
10 to 144.45%5.59%1.14%
15 to 194.43%4.79%0.36%
20 to 248.06%8.13%0.07%
25 to 2911.06%12.58%1.52%
30 to 446.87%7.33%0.46%
45 to 643.58%3.99%0.41%
65 to 742.39%2.68%0.29%

Homeownership rates and sales data are always important. But it's also interesting to look at the number of existing homes coming onto the market — something that can have a huge effect on the inventory of homes for sale.

Looking at the chart above, it seems that the seller's market that flourished in 2020 enticed more homeowners to put their homes on the market. Possible factors include:

  • Historically low interest rates have increased demand
  • A continuing inventory shortage that helped push home prices up
  • An increase in the number of people working from home and no longer tied to a location

However, while it's clear that more homeowners entered the market, it's interesting to consider how homeowners with different lengths of ownership responded to the situation.

For instance, the Year-over-Year (YOY) increase of 1.66% in the 1- to 4-year owners and 1.39% in the 5- to 9-year owners seems likely to be the result of people taking advantage of low rates and the increase in equity to move into something possibly bigger or more expensive. They may also be taking advantage of the freedom of working remotely, which could allow them to seek areas with a lower cost of living.

The group of 10- to 14-year owners would have bought at high prices just before the housing crisis. The spike of 1.14%, for a total of almost 6% moving, could mean that home values have increased to the point where these owners are finally able to sell and get back their original investment.

On the other hand, there's not much difference YOY for the 15- to 24-year homeowners, possibly because these are established families who want to stay settled.

Finally, the significant increase of 1.52% for the 25- to 29-year owners could indicate that empty nesters are seeing a good opportunity to downsize or relocate while making the most of their equity.

What does this mean for the future?

For some time, homeowners have tended to stay in their homes longer, on average, than in the past.Footnote1 Looking at the recent increase in mobility, it's fair to wonder whether that trend is going to change. If that's the case, it could help ease the inventory shortage that has been helping to drive up prices.

In addition, since homeownership rates are higher in older generations, we may naturally see more homes coming on the market as the boomer generation ages out of homeownership. That could be good news for first-time buyers looking for opportunities. However, only time will tell.

1 Source: U.S. Census Bureau, Current Population Survey, 2020 Annual Social and Economic Supplement.

2 Source: U.S. Census Bureau, Current Population Survey, 2019 Annual Social and Economic Supplement.

3 "A Quarter of Homeowners Haven’t Moved in 20 Years," REALTOR® Magazine, January 25, 2021.

MAP3514491 | 03/2021

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