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50 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Why Homeowners Won't Move "Homebodies" are becoming more common as fewer homeowners sell their current homes. H omeowners are staying in their homes longer and longer, according to First American Chief Economist Mark Fleming. These long-term owners are contributing to the short supply problem and driving the low home sale trend. As Fleming says, "It's hard to buy what's not for sale." The increased tenure in homes may be due to a number of fac- tors, according to Fleming, notably mortgage rates, supply, credit standards, foreclosure rates, and home equity. Many homeowners are unwilling to sell and lose their 3.5 percent mortgage, as the cur- rent rate of 4.6 percent is consid- erably less attractive. As for supply, as these "home- bodies" worsen the inventory problem, they are also impacted by it. "As the supply of homes for sale increases, the risk of not be- ing able to find something to buy falls and homeowners become more confident in the decision to sell," says Fleming. "Today's sig- nificant lack of supply is prevent- ing homeowners from selling and driving tenure length up." Despite the highest levels of tappable equity in history, home- owners are still hesitant to sell due to the above factors. Tight credit standards are also holding many in their current homes, as many homeowners may be less likely to receive mortgages for a new home due to these historically tight standards. Fleming states that we are in an "unprecedented" homebody era, with increasing mortgage rates, low supply, low rates of foreclo- sure and tight credit increasing homeowner tenure to the highest level in 18 years, and there is cur- rently no end in sight. "While it is unlikely the influ- ences that are currently driving tenure higher will change in the near term, more than half of all existing-homes are owned by baby boomers and the silent generation, who will eventually age out of homeownership," said Fleming. "When that occurs, the problem may not be a lack of supply, but the exact opposite." "Today's significant lack of supply is preventing homeowners from selling and driving tenure length up." —Mark Fleming, Chief Economist, First American