Homeowners Are Happy Where They Are— That Might Be Bad News for the Housing Market

More than a third of U.S. homeowners know exactly when they will sell their home: never.

That’s one of the results of real estate data firm Redfin’s latest survey, which showed that the “lock-in” effect could continue to influence the housing market, creating lower inventory levels and putting upward pressure on prices. In addition to the 34% who said selling their home isn’t an option, more than a quarter said they won’t consider selling for at least the next 10 years. Only 7% said they would sell within the next three years.

The most popular reason homeowners give for staying put is that nearly 40% said their home is almost or completely paid off, while nearly as many said that they had no reason to move and were happy in their current location.

High Borrowing Costs, Expensive Home Prices Help Discourage Listings

Costs are another big factor influencing homeowners’ decision to move, the Redfin report said.

“The just-because movers—those who just want a bigger or nicer house—are staying put, mostly because it’s so expensive to buy a new house,” said Marije Kruythoff, a Redfin Premier agent in Los Angeles, in a prepared statement. 

Mortgage rates have hovered near their highest levels in two decades, with the 30-year, fixed-rate mortgage near 7% last week, according to Freddie Mac. Meanwhile, the average rate for an existing mortgage of the same type is close to 4%, according to Wells Fargo. The gap between the borrowing costs homeowners are currently paying and those they would pay if they were to sell and buy a new home is prompting many homeowners to stay put.

“The people who are selling are doing so because they need to. Either they’re relocating to a different part of the country, or they’re moving due to a major life event like having a baby or taking a new job on the opposite side of the city,” Kruythoff said.