Shorter AND Longer Term Mentality
One of the housing statistics that has seemingly been around forever is that the average U.S. homeowner moves every seven years.
If that was ever true before . . . it’s not anymore.
My guess is that that number was never right: if two homeowners move after three years, and a third stays put for 15-plus years, the average for all three is seven years — even though none of the three stayed anywhere near that long.
Housing Time Frame(s)
So, in today’s housing market, are people staying put longer or shorter?
At one end of the spectrum is a brand, new group of renters who are simply waiting: for the housing market to bottom; for their credit to be rehabilitated and to accumulate a down payment; and/or to log enough time at a new job — typically, 2 years — to qualify for a mortgage.
At the other end of the spectrum are homeowners who appear to be making do with what they have.
“The Inertia Factor”
Certainly part of that is psychology: when you don’t know what to do, the easiest thing to do is . . . nothing.
So, would-be Buyers and Sellers buffeted by a torrent of negative housing news are simply hunkering down, waiting for the dust to settle.
But another component is undoubtedly financial.
Many homeowners nationally who bought in the last five years are now underwater on their mortgages.
Practically, that means two things: 1) they don’t have a down payment to roll over into another home; 2) they can’t sell unless they can either bring (potentially a lot of) money to closing, or, persuade the bank(s) to reduce their mortgage balance (called a “short sale”).
The combination of those two factors — inertia and financial wherewithal — is keeping more homeowners in place, longer.