According to a recent survey commissioned by Redfin, 34% of homeowners said they will never sell their homes. An additional 27% said they have no plans to sell their homes for at least 10 years.
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Although there are many factors involved in home pricing and affordability, these survey results highlight one of the primary reasons the housing market is so challenging for new buyers.
With few homeowners motivated to sell anytime soon, if ever, inventory might be tight for a decade or more to come. Homeowners are reluctant to sell, so what does this mean for homebuyers?
Reasons Homeowners Want To Stay Put
According to the Redfin-commissioned survey, there are five primary reasons homeowners aren’t motivated sellers.
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‘My Home Is Completely or Almost Paid Off’
Cited by 39% of respondents, having a completely or nearly paid-off home is a common reason to want to stay namely because of solely being responsible for property taxes, maintenance and/or HOA fee.
‘I Just Like My Home and/or Its Location and Have No Reason To Move’
About 37% of survey respondents indicated that they don’t intend to sell their homes because they simply enjoy their living spaces. It’s unsurprising these types of homeowners are holding steady in the market.
‘Home Prices Are Now Too High’
Even house-hopping homeowners are staying put these days because home prices are so astronomically high. Nearly one-third of respondents (30%) indicated they won’t be going anywhere until home prices fall.
‘I Don’t Want To Give Up My Low Mortgage Rate’
During the pandemic, mortgage interest rates fell to 3%. In today’s market, it can be hard to get a mortgage rate under 7%. With this huge disparity in interest rates, even if homeowners downsized, their mortgage payments would likely go up. For this reason alone, 18% of respondents said they aren’t going anywhere anytime soon.
‘My Children or Other Family Members Are Still Living in My Home’
About 16% of respondents plan on keeping their homes because they don’t want to disrupt the environments they built for their families. Moving under these circumstances potentially means uprooting children from the only home they’ve ever known and assimilating into a new community.
What Does This Mean for Homebuyers?
Unfortunately, the combination of high home prices, low inventory and high mortgage rates is a recipe for unaffordability. Until rates and prices fall, most homeowners aren’t going anywhere. However, with more than 60% of homeowners in the Redfin-commissioned survey planning to hang on to their homes under nearly any circumstance, inventory may remain tight.
What may chip away at the inflexible market are lower interest rates. They likely would increase available inventory, making home prices more affordable. However, this is far from a certainty. With the economy continuing to prove surprisingly resilient, the Fed still has to be wary about containing inflation. Thus, the dramatic fall in rates that many market participants desire may still be a foregone conclusion for a while.
Another unknown is the effect Donald Trump’s second presidential term — backed with a Republican Congress — may have on inflation, interest rates and capital markets. If Trump’s pro-growth policies and sweeping tariffs keep inflation higher for longer, rates aren’t likely to go down anytime soon.
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This article originally appeared on GOBankingRates.com: A Third of Homeowners Say They’ll Never Sell Their Homes — What That Means for Homebuyers
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