Real estate’s new normal: Homeowners staying put

Source: New York Times

The median amount of time homeowners live in their home rose to about eight and a half years in 2016, the longest tenure since Moody's Analytics and First American Financial Corporation began tracking such data in 2000. Mortgage rates may be the reason owners refuse to move, which is keeping inventory stubbornly low. And economists predict homeowners will continue to lengthen their stay in a home through the next decade. Many homeowners refinanced their mortgages in recent years when interest rates were at historic lows—around 3.25 percent for a 30-year fixed-rate mortgage. Now that interest rates have increased, mortgage payments would jump significantly for homeowners, even if they find a similar home for the same price. For example, a $500,000 30-year fixed-rate mortgage for $500,000 with an interest rate of 5.5 percent would increase a monthly payment from $700 to $3,600, including estimated taxes and fees.