The housing market has recovered greatly in comparison to the housing price hitting its all-time low six years ago. The house prices, however, have reached unprecedented highs, largely caused by the shortage of housing inventories. Among the existing types of housing supplies, the single-family housing constructions remain low and the home-builders are failing to meet the needs of current demand.
The culprit behind the rising sale price, and declining housing inventories, of the housing market is the increasing amount of time Americans stay in their homes. It puts a strain on the housing inventory. American homeowners are staying for an average of 13 years in their homes, which is five years longer than they did in 2010. For first-time buyers, the expected length of stay in a single-family house is approximately 11.5 years.
In large part, homeowners tend to stay longer in their current houses due to the stagnation in the housing market and shortage of inventory. There are many other factors that one might be concerned about:
- Aging baby boomers want to “age in place.” The healthy lifestyles have prolonged their lifespans. Baby boomers are transitioning to retirement much later in life than previous generations. They prefer modifying their current homes to adjust to their shifting demands with the help of a variety of home equity loans. In addition, they might be facing more mortgage debt than the previous generations, limiting their ability to change their current residences.
- Some states have implemented tax policies that make it easier for older residents to remain in their houses. States like California and Texas limit the increase in property tax as long as homeowners stay put. If they want to sell their houses, they have to pay capital-gains taxes on the windfall and much higher property taxes.
- There is a home-improvement renaissance. As there aren’t enough houses that fit every homeowner, more and more homeowners choose to take improvement projects into their own hands. Plus, the improvement projects create long-term benefits such as returns on investment. If you wonder what are some improvements that can increase the resale value, click here.