A lack of supply has been a persistent buyers’ challenge in the housing market since the financial crisis. There are not enough houses on the market, which has contributed to significant price surges in many cities.
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. 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. Many current homeowners are reluctant to move, as risk aversion set in after the crisis. Reduced labor market mobility has also led to less people leaving their homes and, more recently, higher mortgage rates have locked in many current homeowners, as a mortgage on a new home would mean an even higher interest rate.
Whatever the reason, many homeowners have opted to stay in place, but how long they choose to do so varies by location. We set out to assess the variation in the 50 largest cities in America. On average, homeowners have been in their houses for about 7 years, with a high of 7.54 years in Pittsburgh to a low of 6.36 in Las Vegas. The difference may not seem like much, but our research reveals a significant difference in home price appreciation that is related to the average tenure.
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Key findings
- Cities with shorter housing tenure have greater price appreciation. The top 10 cities had an average tenure of 7.46 years and an average three-year home price appreciation of 12%. The bottom 10, with an average tenure of 6.63 years, have average price appreciation 30%. This suggests that higher housing turnover drives prices upwards, while faster price appreciation could be enticing home owners to sell.
- The northeast dominates the list of cities with the longest tenure. The top three cities, Pittsburgh, New York and Buffalo are all in the northeast. An additional three northeastern cities are in the top 10 for a total of six.
- Hot and sunny places have the shortest tenures. The three cities with the shortest tenures — Las Vegas, Phoenix and Austin — are all in warm-weather areas. This reflects high migration rates to those cities, something we looked at in a prior study on where Americans are moving. Denver is the only city in the bottom 10 that experiences a significant winter season.
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Cities in America with the longest housing tenure
Here are the top 20 cities with homeowners who stay put the longest:
Image Credit: Depositphotos.
20. Virginia Beach, Virginia
Average housing tenure: 7.17
Median value: $245,900
Three-year home price appreciation: 6%
Image Credit: DenisTangneyJr.
19. Richmond, Virginia
Average housing tenure: 7.17
Median value: $237,900
Three-year home price appreciation: 11%
Image Credit: DepositPhotos.com.
18. Birmingham, Alabama
Average housing tenure: 7.22
Median value: $161,400
Three-year home price appreciation: 11%
Image Credit: DepositPhotos.com.
17. San Francisco
Average housing tenure: 7.23
Median value: $849,500
Three-year home price appreciation: 29%
Image Credit: Depositphotos.
16. Boston
Average housing tenure: 7.24
Median value: $441,400
Three-year home price appreciation: 18%
Image Credit: DepositPhotos.com.
15. Chicago
Average housing tenure: 7.29
Median value: $240,300
Three-year home price appreciation: 13%
Image Credit: DepositPhotos.com.
14. San Jose, California
Average housing tenure: 7.30
Median value: $957,700
Three-year home price appreciation: 30%
Image Credit: Courtesy of wikimedia.org.
13. St. Louis
Average housing tenure: 7.30
Median value: $172,200
Three-year home price appreciation: 10%
Image Credit: DepositPhotos.com.
12. Milwaukee
Average housing tenure: 7.31
Median value: $213,800
Three-year home price appreciation: 12%
Image Credit: Davel5957/istockphoto.
11. Baltimore
Average housing tenure: 7.32
Median value: $297,300
Three-year home price appreciation: 6%
Image Credit: Davel5957/istockphoto.
10. Memphis, Tennessee
Average housing tenure: 7.37
Median value: $148,800
Three-year home price appreciation: 12%
Image Credit: Davel5957/istockphoto.
9. Providence, Rhode Island
Average housing tenure: 7.40
Median value: $277,400
Three-year home price appreciation: 11%
Image Credit: TheProvidenceRink/facebook.com.
8. Los Angeles
Average housing tenure: 7.42
Median value: $617,100
Three-year home price appreciation: 25%
Image Credit: DepositPhotos.com.
7. Cleveland
Average housing tenure: 7.44
Median value: $150,400
Three-year home price appreciation: 9%
Image Credit: Ron_Thomas/istockphoto.
6. Hartford, Connecticut
Average housing tenure: 7.45
Median value: $247,900
Three-year home price appreciation: 2%
Image Credit: DepositPhotos.com.
5. New Orleans
Average housing tenure: 7.48
Median value: $193,100
Three-year home price appreciation: 11%
Image Credit: DepositPhotos.com.
4. Philadelphia
Average housing tenure: 7.49
Median value: $250,900
Three-year home price appreciation: 7%
Image Credit: DepositPhotos.com.
3. Buffalo, New York
Average housing tenure: 7.50 years
Median value: $148,900
Three-year home price appreciation: 19%
Image Credit: .
2. New York
Average housing tenure: 7.53 years
Median value: $440,900
Three-year home price appreciation: 11%
Image Credit: Eloi_Omella.
1. Pittsburgh
Average housing tenure: 7.54 years
Median value: $153,300
Three-year home price appreciation: 14%
This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.
Image Credit: HaizhanZheng/istockphoto.
