Real Estate: Homeowners are Staying Put Longer
Roseville, CA- For years it was normal for homeowners to stay in their homes for 4 to 5 years. Today the median amount of time homeowners live in their home has grown to about eight and a half years, the longest tenure since 2000 when this started to be tracked.
Industry experts are predicting homeowners will continue to lengthen their stay in a home over the next ten years. Mortgage rates may be the reason owners are not moving, which in turn, is keeping inventory of homes for sale at very low levels.
There are not many homeowners who have not refinanced their mortgages in the past few years to take advantage of low interest rates. With interest rates creeping up, payments would increase significantly even if they find a home at the same price. Right now we have the Federal Reserve hinting interest rate increases and economists expect mortgage rates to head toward 5 percent by the end of the year. The higher rates climb, the more tempting it becomes for people to stay where they are. If rates get to 5 percent or higher, homeowners who are enjoying low mortgage interest rates be very reluctant to consider selling and buying a new home.
There are many other factors influencing the housing market. Among these is the Trump tax plan which would remove incentives for homeownership even if they leave the mortgage interest deduction as part of the code. There is no certainty in the prediction of rising rates, based on the economy’s performance the Fed could hold off increasing rates.
The increase in homeownership tenure is example of how the economy is still dealing with the impact of the financial crisis and the government’s measures to deal with it. In addition, owners staying in their homes longer demonstrate how far the housing market remains from its pre-recession “normal.”
If you or someone you know is considering buying or selling a home and have questions, feel free to contact me at the MagnumOne Realty office in Roseville (916-899-6571) or send me an email to email@example.com. I would love to hear from you.