In a recent economic outlook report utilizing public records data, CoreLogic determined the median number of years that home sellers had owned their home increased by three years between 2007 and 2013, and has increased an another year for each year since then coming to the most recent report showing 10 years between sales. Additionally, CoreLogic reports that government survey data for all homeowners shows a similar duration in ownership period following 2007. The lessened movement in the housing market could potentially have ramifications in the future by reducing mortgage originations as well as the number of mortgages serviced and put into default.
“Prior to the Great Recession and home-price crash, the typical length of ownership had been fairly stable, but after 2008 the length of time that owners have kept their home has lengthened,” says Frank Nothaft, Chief Economist for CoreLogic. “And the trend is consistent whether looking at how long recent sellers had owned their home, or looking at how long current homeowners have been in their home.”
CoreLogic states that labor market, housing and demographic trends are attributed to why homeowners have chosen to remain in their homes longer. Likewise, current labor market research shows the severity and broad geographic impact that the Great Recession and how it may have discouraged homeowners from relocating. The report cites that there has been a gradual, secular decline in worker mobility, potentially correlating to advances in communication and office technology.
What’s more, CoreLogic says the substantial decrease in home values during the housing crash may have caused a significant financial disincentive to those who may have planned to sell and move. This could be because either the value loss eliminated all the housing wealth or adult children moved back to the family house. Likewise, demographics are a factor in this with a large portion of the Baby Boomers putting down roots in communities and becoming less willing to relocate.
Additionally, the report compares the length of owning a home in the United States to that in other countries. CoreLogic public records data for Australia and New Zealand showed similar lengths in ownership for recent sellers compared with the U.S., and survey data for the United Kingdom and Canada showed the typical length of ownership being close to a decade as well. Despite differences in national housing markets, the report states that transaction costs in trading homes are leading homeowners to keep their homes for many years.