The preference that older Americans have for aging in place in their own homes is showing up in broader trend data, according to a new report from Redfin.
While “homeowner tenure” has fallen slightly since its 2020 peak, the length of time that homeowners are remaining in their properties doubled to 11.9 years last year, up from 6.5 years in 2005, according to a Redfin analysis of median U.S. homeowner tenure by year using county records.
The trend is driven primarily by older Americans, particularly baby boomers, who are electing to stay in their homes longer.
“Nearly 40% of baby boomers have lived in their home for at least 20 years, and another 16% have lived in their home for 10-19 years,” the report reads. “For Gen Xers, more than one-third (35%) have lived in the same home for at least 10 years.”
Millennials are a bit of a different story, since members of that generation tend to change jobs more often than prior generations. Less than 7% of millennials have been in their homes for at least 10 years.
Older generations have an outsized level of influence over the U.S. housing market for multiple reasons, Redfin said.
“One, the American population is aging: Roughly 17% of people in the U.S. were 65 and older as of 2020, up from 13% in 2010,” the report reads. “Two, they’re most likely to own homes: Nearly 80% of baby boomers and 72% of Gen Xers own their home, compared to 55% of millennials and 26% of Gen Zers.”
Older Americans also have financial incentives attached to staying in their homes, since 54% of the baby boomer cohort own their homes free and clear without making monthly mortgage payments.
“For that group, the median monthly cost of owning a home — which includes insurance and property taxes, among other things — is just over $600 (similar to the monthly cost for other generations with no outstanding mortgage, but other generations are far less likely to own homes free and clear),” the report stated.
Baby boomers who continue to make a mortgage payment are also doing so at a lower interest rate when compared with more recent homebuyers, making the prospect of buying another home less attractive than it would be if they entered the market again in the current rate environment.
Regarding its sources and methodology, Redfin defines homeowner tenure as “the number of years between the most recent sale date of a home and December 1, 2023.” It added that data on homeowner tenure by generation is compiled by analysis of the U.S. Census Bureau’s one-year American Community Survey in 2022, the most recent year for which data is available.
Homeowner tenure is projected to remain flat, but a larger share of homeowners remaining in place is also contributing to an inventory shortage, according to the report.
“Long homeowner tenure, particularly among baby boomers, is an obstacle for young first-time buyers trying to break into the market,” the report read. “A recent Redfin analysis found that empty-nest baby boomers own twice as many three-bedroom-plus homes than millennials with kids. Some young families are turning to new construction, and others are renting homes.”
