Since the financial crisis, the U.S. has dealt with an ongoing inventory shortage, as many home builders left the industry after the crisis. The shortage has contributed to significant price surges in many cities, leaving homeowners with no choice but to stay put and not sell just yet.
According to LendingTree Chief Economist Tendayi Kapfidze, homeowners have been in their houses for about 7 years on average, and out of the 50 cities LendingTree studied, LendingTree found a high of 7.54 years in Pittsburgh to a low of 6.36 in Las Vegas.
“The inventory shortage is often attributed to a lack of sufficient new construction, as many home builders left the industry after the crisis, and increasingly expensive labor and materials have reduced the margins on lower-priced homes,” Kapfidze said. “There is also a decreased supply of existing homes available for sale, which accounts for a much larger share of the total housing market than new construction.”
He also notes that many homeowners are staying put to reduce risk following the crisis. Additionally, he states that homeowners are also locked in by higher mortgage rates and limited job mobility.
According to the study, cities with the shortest average homeowner tenure have greater price appreciation on average than those with the longest tenure. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12 percent. According to LendingTree, this suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing homeowners to sell.
These shortest tenures can be found in the sunniest places, such as Las Vegas, Phoenix, and Austin, according to LendingTree, with Denver being the only city in the bottom 10 that experiences a significant winter season. The longest tenures can be found in the northeast, with the top three cities being Pittsburgh, New York, and Buffalo.