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Construction of affordable starter homes is failing to keep pace with the number of first-time house hunters. At the same time, more homeowners are resisting the siren song of selling to these potential buyers in order to move up or downsize. It's a trend called "rising tenure length."
Owners are staying put. There’s no single reason why and there’s no single age group increasing home tenure. However, early in December 2019, a HousingWire (HW) headline shouted that Baby Boomers — born from 1946 to 1964 — are “likely to gridlock” home sales in 2020. HW cited the leveling out of home prices and economic unpredictability as central factors keeping older homeowners in place.
Move ‘Em On, Head ‘Em Up
Well whoa! HW should maybe also consider that moving down can be almost as expensive as moving up, affordable homes styled for retirement are in short supply in many markets, and a lot of older homeowners want to age in place where services and neighbors are familiar.
HW’s headline might stir the theme song of the cowboy TV series Rawhide (1959-1965) in Boomer brains. The show featured a lot of cattle drives, Clint Eastwood as a tough cowhand and lyrics like “Move ‘em on, head ’em up.” Many Boomers might also feel like channeling Eastwood in Gran Torino by growling, “Get off my lawn.”
But according to a December 2019 article in MarketWatch, anyone who can hang in there long enough will have access to a market influx of about 1.17 million boomer homes a year between 2027 and 2037. They call this projected event the “Silver Tsunami.”
Millennials Staying Put Too
To be fair, it’s essential to note that many younger homeowners also are staying put. Favoring a buy-once-and-stay approach, many have lived with parents longer than expected to save for down payments on bigger homes.
In a December 2019 article predicting a tough housing market in 2020, CNBC interviewed realtor.com Senior Economist George Ratiu, who said supply will be a greater problem than price this coming year. Ratiu stated that waiting longer to buy homes has caused Millennials to buy up at the outset of homeownership.
Avoiding Migrating Near or Far
CNBC also noted analysis of U.S. Census data by the national real estate brokerage Redfin showing that property owners today generally remain in a home for 13 years, and that this statistic is an 8-year increase over 2010.
Writing at the science news website Phys.org, migration researcher Thomas Cooke echoed Ratiu’s point about millennials buying homes they can grow into. Cooke added that many millennials are finding it difficult to move up due to a complex array of reasons, including carrying a heavier debt load than previous generations.
Furthermore, Cooke said, long distance moves are complicated by the fact that most millennial couples have dual incomes. Major relocation needs to accommodate both their jobs.
Cooke concluded that avoiding migration and putting down roots in one location is becoming the norm. It’s a choice with beneficial outcomes, he asserted, such as deeper social and community connectedness. So, forget that other famous lyric from Rawhide about “rollin’, rollin’, rollin’.” Homeowners of many ages are now stayin’, stayin’, stayin’.