Buyers seeking a home purchase face many challenges and a new survey suggests at least one challenge will remain for the foreseeable future. Fewer current homeowners have expressed interest in selling, reducing the number of homes on the market.
In fact, a new survey conducted for real estate broker Redfin found 34% of current homeowners have no intention of “ever” selling while 27% say they wouldn’t consider selling for at least 10 years.
Broken down by generation, older homeowners are more likely than their younger counterparts to say they’ll never sell. More than two of every five baby boomer homeowners say they’ll never sell, compared to 34% of Gen X owners and 28% of millennial/Gen Z owners.
This fact makes it harder to buy a home for a couple of reasons. Fewer home listings reduce options.
But a second important factor is what limited inventory does to home prices. When there are a limited number of homes, there is more competition among buyers, allowing sellers to remain firm on asking prices.
New listings of existing homes are below pre-pandemic levels in much of the country, though listings have started ticking up in recent months. A recent Redfin analysis found that just 25 of every 1,000 U.S. homes changed hands in the first eight months of 2024, the lowest turnover rate in decades.
Why fewer people are moving
Nearly two in five (39%) homeowners who don’t plan to sell anytime soon say it’s because their home is almost or completely paid off, making that the most commonly cited reason.
Homeowners who have paid off their mortgage are motivated to stay put because it means they own their home free and clear, and get to live there while paying only for things like property taxes and HOA fees. Almost as many respondents – 37% -- said they’re not selling because they simply like their home and have no reason to move.
Affordability appears to be another major reason homeowners are hesitant to sell. Nearly one-third of respondents said they’re staying in their current home because today’s home prices are too high, and 18% don’t want to give up their low mortgage rate. This survey question was asked to respondents who have owned their home for at least six years and have no intention of selling within the next five years.
Homes cost more
Housing costs have risen significantly since before the COVID-19 pandemic; home prices are up roughly 40% since then, and the weekly average mortgage rate is 6.91%, up from just under 4% in 2019. A recent Redfin analysis found that more than 85% of U.S. homeowners with mortgages have an interest rate below 6%.
“The just-because movers—those who just want a bigger or nicer house—are staying put, mostly because it’s so expensive to buy a new house,” said Marije Kruythoff, a Redfin Premier agent in Los Angeles.
Simply put, most of the people who are selling their homes are selling because they need to. Those numbers may be too small to increase the number of available homes for people who want to buy.