Older Americans are Staying in Their Homes Longer

Homeowners today spend 11.9 years in their homes, which is an increase from 6.5 years just two decades ago. Tenure for homeowners peaked at 13.4 years in 2020 but has declined since then.

Baby boomers aging in place are driving homeowner tenure up, according to a new report from Redfin. In fact, nearly 40% of baby boomers have lived in their current home for at least 20 years, with another 16% residing in the same home for 10-19 years.

Conversely, only 35% of Gen Xers have lived in the same home for at least 10 years, while Millennials typically stay in homes for shorter periods. This is due, in part, to their youth and the likelihood of job changes, which are more typical than in older generations. Less than 7% of Millennials have lived in their current home for 10 years or more, 13% for 5-9 years, and 30% for less than 5 years. Finally, Gen Zers who own a home have had it for less than five years. Obviously, with the oldest Gen Zer turning 26 years of age in 2023, this isn’t surprising.

According to the report, there are some clear-cut reasons why homeowner tenure has increased.

For starters, there are financial reasons for older Americans to keep their homes. Most baby boomers (54%) who own homes have no outstanding mortgages. As a result, the average monthly cost of owning a home, which includes insurance, property taxes, and maintenance, adds up to just over $600.

In addition, Baby Boomers who still have a home mortgage have a much lower interest rate than they would if they sold their current home and bought a new home considering today’s interest rates.

Also, some state tax systems incentivize older homeowners financially, which encourages aging in place. In Texas, for example, homeowners over 65 can defer property taxes until the home is sold.

Overall, the ease and affordability of moving that existed in the early 2000s is long gone, another consideration for the increase in home tenure.

But, perhaps most importantly, many older Americans prefer aging in their own homes. In fact, in a recent survey, nearly 9 in 10 Americans between 50 and 80 years old said it’s important to stay in their own home as they get older.

Yet, while the financial and emotional reasons for older Americans staying in the same home for longer is understandable, it is contributing to the inventory shortage. This is an obstacle for first-time home buyers trying to find a home. As a result, some young families are turning to new construction, while others are renting homes.

Homeowner tenure peaked in 2020, has dropped 1.5 years since then, and is expected to remain flat. Due to the pandemic moving frenzy, remote work, and record-low mortgage rates at that time, more homes changed hands in 2021 than any year since 2006.

Homeowner tenure is expected to remain flat or increase just slightly in the foreseeable future, according to the Redfin report. Existing-home sales hit a 15-year low last year, with many homeowners locked in by low mortgage rates. However, home sales are expected to pick up a bit in 2024, a positive sign of movement in the market.