Homebuyer demand is near an all-time high, but why are there so few houses for sale?
The answer could be that we are in the “homebody era”.
What is the “Homebody Era”?
Homeowners are reluctant to sell, preferring to live in their current home rather than looking to either “step-up” or “downsize”. This means that there are fewer homes for sale and could result in a housing shortage for years to come. Historically, the average American lived in their home for an average of five years. In 2008 & 2009, during the height of the mortgage crisis, that number had increased to an average of seven years. By May of this year, that number had increased to 11.3 years!
Why Aren’t Homeowners Selling?
Two powerful forces are likely to crimp housing supply in the years ahead, according to a recent article in Business Wire. The first is the reluctance of many homeowners to trade historically cheap mortgages for pricier ones when they move. And the second is the tendency for more seniors to age in place.
Mortgage interest rates still remain highly affordable, and even showed a recent dip. The average rate on a 30-year fixed-rate mortgage fell to 4.07 for May, down from 4.59 a year earlier. But that’s still higher than lows seen during the housing slump and recovery. The average annual rate hit a trough of 3.65 in 2016, barely beating a previous record of 3.66 set in 2012. This suggests homeowners will feel even more pressure to hang onto their homes in the years ahead, rather than sell and buy a new one using a mortgage with higher rates.
I’m Just Going to Stay Here
The growing tendency of seniors to choose to age in place is a second force that is likely to curtail inventory in the years ahead. Improvements in health care and technology have made aging in place easier which means fewer homes on the market.
What Can Be Done?
Many industry experts are calling for more home construction and changes to zoning laws to allow more homes to be built and allow for multi-family homes to be constructed. This has prompted concerns that builders will focus more on luxury or higher-priced communities rather than on affordable housing options. This is already the case in the Triangle. Many builders are constructing “zero lot line” communities with larger homes on smaller lots. In downtown Raleigh and Durham, there has been an explosion of high-end condo projects.
About Log Pond Realty
Home is where your story begins. Home is where hopes and dreams are born, memories are made, and lives are lived. We would love the opportunity to assist you in writing your new story.
We service the Triangle region of North Carolina including Raleigh, Cary, Apex, Holly Springs, Morrisville, Fuquay-Varina, Durham, Chapel Hill, Wake Forest, and Garner.
Phone 919.589.3576 | Email at email@example.com
Business Wire, June 20, 2019.