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New home purchase applications were up 21% in August compared to last year, according to recent data. This is a positive sign, even though we still have a ways to go before returning to pre-pandemic levels.
When looking at builder application surveys dating back to 2012, current levels don’t seem so dire. There have been lower points, and we’ve generally been trending in the right direction.
New home sales are promising, as they will add to inventory when resold in the coming years. This got me thinking about the typical homeowner timeline.
The average homeowner stays in their house a remarkable 13 years, based on current analytics. With mortgage rates so low in recent years, people have been staying put longer.
Consider where we were 13 years ago – 2010. The homes built while Toy Story 3 was in theaters are likely coming up for sale soon, statistically speaking.
Homeowners may want to sell, even if listings aren’t apparent yet. Extensive research determines how long loans and homeowners typically last. The 13 year average is based on painstaking analysis of massive data, not guesses.
With over 82 million single family residences in the U.S., the sample size is huge and the statistics robust. Neighborhoods built 13 years ago are primed for agents and lenders to generate new business.
The graph below shows consistent home-ownership tenure from 2012-2021. We can reasonably predict when an area will see more sellers based on build year.
Target neighborhoods about 12-14 years old. Go door-to-door like marines, letting homeowners know about current opportunities. The data suggests focusing where turnover is statistically probable.
The market always has challenges but current data gives reason to be optimistic about the road ahead. This is a time for agents and lenders to engage with potential clients, demonstrating how they can navigate a changing housing market.
