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Latest Calculations Show Average Buyer Expected to Stay in a Home 13 Years

By Paul Emrath, Ph.D.
Economics and Housing Policy
National Association of Home Builders


Report available to the public as a courtesy of HousingEconomics.com


Table of Contents

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First Time Table

Trade Up Table 

All Single Family Table

See previous Special Studies

NAHB last published an article on how long buyers remain in their homes in early 2009. The 2009 article showed that, based on a long-run calculation that averaged the available data over the years 1985 through 2007, the typical buyer could be expected to stay in a single-family home roughly 12 years before moving out.

Since then, the economy has gone through a severe recession, with homes and home buyers subject to historically unusual changes and stress, making this a logical time to revisit the data and see if things may have changed.

This article revisits the length of time buyers are expected to remain in their homes, using data that has recently become available from the 2011 American Housing Survey (AHS, funded by the Department of Housing and Urban Development and conducted in odd-numbered years by the Census Bureau). The new data show that homeowner mobility has generally declined since 2007, and—if based only on mobility rates calculated from the most recent data—the expected length of stay in a single-family home would be about 16 years.

However, because the data from the most recent period are likely to be atypical, the article also provides a long- run calculation that averages mobility tendencies over a substantial number of years. Incorporating the latest data into the long-run average produces a revised estimate of 13 years for the expected length of time a typical single-family buyer will remain in his or her home. For first-time buyers, the expected length of stay in a single- family home is somewhat shorter (about 11 and a half years, compared to 15 years for buyers who have owned a home before).

Homeowner Survival Table

Estimating the expected time a buyer will stay in a home is not as straightforward as you might think. Simple averages either cannot be computed or are misleading, as no data set tracks a panel of buyers until everyone moves out, and one-year mobility rates don’t adequately account for the effect of unusually frequent and infrequent movers (see the 2009 article for further discussion).

To deal with these issues, NAHB has traditionally relied on an approach based on actuarial (sometimes called survival or life) tables. A familiar example of an actuarial table is one that uses death rates by age to calculate life expectancies (see, for instance, the Actuarial Life Table published by the Social Security Administration).

When an actuarial approach is applied to home buyers, “age” becomes the length of time since the buyer first moved into the home, and a “death” occurs when the buyer finally moves out. The only real complication is caused by the every-other-year nature of the AHS—rather than observing how many people “die” before becoming one year “older,” the AHS shows how many owners moved out sometime in the two years before the home is surveyed again. In this article, the two-year AHS move-out rates are annualized simply by cutting them in half.[1] Table 1 shows results of these calculations for home owners who moved out between the 2009 and 2011 installments of the AHS.


Table 1. Survival Table for Single-Family Home Owners

As shown in the table’s second row, 5.5 percent of single-family buyers move out within a year after moving in, so that 94.5 percent survive (i.e., are still living in the home they purchased) at the end of the year. The following year, 5.8 percent of the first-year survivors move out, leaving 89.0 percent of the original pool of buyers in the home by the end of the second year, and so on.

By the time the table reaches year 16, half of single-family home buyers have moved out of the homes they originally purchased in year 0. This is the expected length of stay in an owner-occupied, single-family home (equivalent to the estimated life expectancy of a person at age 0).

Table 1 also shows separate results for first-time and trade-up single-family home buyers.[2] There is a stronger than average tendency for first-time buyers to move out of their homes after living in them 4 to 12 years, with the result that it takes only 12 years for half of first-time buyers to move out, compared to 18 years for trade-ups.

Long Run Average

Table 1 is based on the move-out rates calculated from the most recently available data.

Figure 1 shows the results of repeating this exercise with data as it would have been available in earlier years. The heights of the bars indicate the estimated time it would take half of all single-family buyers to move out, using move-out rates from successive pairs of AHS data sets for the years 1985 through 2011.[3] The numbers on the horizontal axis indicate the most recent of the pair of surveys used to generate the estimates. For example, the bar for year 1987 is based on move-out rates calculated from the ’85 & ’87 AHS, 1989 is based on data from ’87 & ’89, etc. In other words, Figure 1 shows the expected length of stay in a home, estimated from data that would have been available in the indicated year.


Figure 1. Estimated Time Till Half of Single-Family Buyers Move Out

As the figure shows, the estimated time until half the buyers move out is higher in the more recent years. The extreme occurs in 2009, when the concurrently available move-out rates imply it would take a full 20 years for half of all single-family buyers to move out. Mobility picked up after that, causing the expected length of stay in a home to drop to 16 years in 2011, but that is still the second longest length of stay in the figure. The extreme in the other direction occurs in 2005, when move-out rates imply it would take only 10 years for half of the buyers to move out.

The extremes reflect a national housing market that was either very hot or very cold when the move-out rates were calculated. In contrast, the period before 2005 was marked by relative stability, when the expected length of stay in a single-family home hovered at or near 12 years.

Although it seems unwise to base an estimate solely on the experience of the most recent (and likely atypical) period, it may also be unwise to discount the recent experience entirely. Therefore, if a single estimate is needed for how long buyers who move in today or in the near future can expect to remain in their homes, NAHB’s Economics and Housing Policy Group recommends 13 years, based on the rounded average across all data points in Figure 1 (to one decimal point, the actual average is 13.3 years).

Table 1 showed that first-time buyers tend to move out of their homes sooner than trade-up buyers. Some readers may wonder if some of the recent trends in Figure 1 were driven by a change in the mix of buyers (trade-up buyers vs. first-timers) in the market. In this context, it’s important to remember that the results in this article are based, not on all current home buyers, but on the moving tendencies in a panel of owner-occupied homes in the AHS, irrespective of when the owners originally bought their homes. So in 2011, we’re looking at what happened to homes that were owner-occupied in 2009, whether those homes were bought (either by first-time or trade-up buyers) the previous year—or 10, 20, or even 30 years earlier. Because only a relatively small percentage of homes turn over between installments of the AHS, many of the home owners analyzed using data available in 2011 were the same owners of the same homes analyzed in data from two, four, six etc. years earlier.

The 20-year spike in 2009 was driven by mobility tendencies that were moving in the same direction for both first- time and trade-up buyers in the AHS panel. The expected length of stay in a home for each type of buyer declined in 2005, increased in 2007 and again in 2009, then reversed course and declined again in 2011 (Figure 2).

Figure 2. Estimated Time Till Half of Single-Family Buyers Move Out

One thing has remained consistent over the historical span shown in Figure 2: the expected length of stay in a single-family home has been consistently longer for trade-up buyers than for first-time buyers. Since 2001, the spread between first-timers and trade-ups has been at least 4 years, and as high as 7 years at the extreme point of 2009. Averaged over all 13 data points in the figure, the average expected length of stay in a single-family home is 11.4 years for first-time buyers, and 14.8 years for buyers who have owned a home before.

A complete set of home buyer survival tables generated from the AHS, including calculations that underlie all of the expected lengths of stay shown in Figures 1 and 2, is available in the “Additional Resources” box that appears at the top of the online version of this article.

[1]For this assumption to hold precisely, move-outs would have to occur at a constant rate over the two-year period, with no homes being re-sold twice to owner-occupiers within the interval.
[2]Following common practice, the term “trade-up” is used as a convenient way to refer to buyers who have owned a home before, even though it may include buyers who are down-sizing, or moving between homes roughly equivalent in value.
[3]HUD initiated the AHS in the 1970s, but it went through a major redesign in 1985 after being reduced in frequency from one to twice a year.

For more information about this item, please contact Paul Emrath at 800-368-5242 x8449 or via email at pemrath@nahb.org.

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