The connection between the economy and homeownership
June 20, 2012
The duration of homeownership is a useful yardstick for other trends, including the overall health of the economy. When it was strong at the beginning of this century, the average length of homeownership was six years, according to Credit Sesame. During the recession, when moves were riskier and finances shakier, people stayed 50 percent longer, up to nine years.
With the gray clouds of the recession clearing, the trend looks to be reversing, and homeowners are expected to own their home for a shorter period of time before selling. Returning to the more mobile pattern that corresponds to slightly better economic health is a good opportunity to explore some of the reasons people will likely be moving more.
Different relocation reasons
Unsurprisingly, the reasons people move are largely dependent on their demographic and their age range. Homeowners between 18 and 44 cite the need for a larger house almost 40 percent of the time, a rate almost eight times higher than sellers who are between 55 and 64. That group of older residents, however, finds themselves moving out of state to be closer to family or friends almost 20 percent of the time they sell a house.
Other factors contributing to a decision to move include job relocation - which is among the most common reasons for all age groups under 65 - undesirable neighborhoods and a family change.
The impact of a stronger economy
The number of Americans moving for these and other reasons is likely to increase if and when the economy recovers. In a strong economy, there is a higher number of available jobs and companies willing to conduct a national search to fill them. Furthermore, growing families more often buy a larger house - with higher maintenance costs - at a time when they are optimistic about the nation's financial situation.
In such situations the costs associated with relocating - selling a home, transportation to a new area and hiring a household moving company - are more willingly shouldered. The promises of a new home that is better suited for the buyer - whether it is closer to a new job or relatives - could outweigh the costs in these circumstances.
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