More homeowners are putting down deep roots and staying put

Buy and hold often turns to gold for many California homeowners.

But cashing in can be costly, especially with the highest mortgage rates in 15 years and a tax code that remains the same a generation later (see next blog item).

So, more homeowners are holding on to their homes nationwide – and in California, according to a recent Redfin report based on the U.S. Census Bureau’s American Community Survey. The average home changed hands at 12.3 years in 2022, down from the record 13.4 years in 2020 — but the COVID pandemic, health and safety protocols, and much uncertainty likely contributed to and prompted the keep-and-stay-at-home trend.


The average American homeowner is staying almost twice as long in their home today compared to the 6.5 years in 2005, when the buy-and-flip home craze and no-doc loan madness dominated the housing market and led to the Great Recession.

“Even though the length of time Americans are staying in their homes has ticked down from the peak it reached in 2020, it’s likely to head back up again in the next few years,” says Redfin senior economist Sheharyar Bokhari. “Today’s mortgage rates are more than double the lows reached during the pandemic homebuying frenzy, which means people have extra incentive to hang onto their homes. That lock-in effect, combined with older Americans’ desire to stay put in their homes, points to lengthening tenure in the future.”

Because buying a home is such a challenge in California – the median home price was $751,000 in January – many homeowners are staying put. 

Californians stay in their homes longer than others nationwide
CityAvg. number of years in a home
Los Angeles18.2
San Jose17.3
San Francisco16.3
San Diego15.4

Source: Redfin

Los Angeles-area homeowners remain in their homes for an average of 18.2 years, the highest rate in the U.S. San Jose was second at 17.2 years, while San Francisco finished in fourth place at 16.3 years. But even in lower-priced markets in the state, such as Riverside and Sacramento, homeowners are staying for about 12 years.


Fast-rising mortgage rates, which have topped 7% in recent weeks, are causing more homeowners to remain in place. Plus, California’s Proposition 13 – passed during one of the first housing booms in the state in 1978 – limits property tax to about 1% and restricts annual increases.

So, for many homeowners in the state, the decision is easy to stay put. Why sell your home, endure a hefty capital gains tax bill, and pay more for a home with a higher mortgage rate, larger monthly payments and massive property tax bill?

But some actions, such as the More Homes on the Market Act (see next blog item) and more employees able to work from home, could encourage buy-and-hold homeowners to loosen their grip during the next few years, Bokhari says.

“More people have the freedom to relocate or move further away from city centers,” he says. “Plus, millennials, the largest generation in the U.S., are in prime moving years, pushed to sell their homes by things like growing families and new jobs.”

Indeed, almost nine of every 10 homeowners younger than 35 years old sell their home during the first seven years, including half before three years, according to Redfin. Fewer than two of every five (37%) homeowners between the ages of 35 to 64 years sell their home within seven years.

Feature photo: Homes on hills in San Marcos. ADOBE STOCK

The More Homes on the Market Act could boost the available housing supply for home shoppers and significantly reduce the capital gains tax bill for sellers. The bipartisan bill was introduced in September 2022. ADOBE STOCK

A smaller tax bite for home sellers could help right-size the market

A bipartisan bill aims to boost the housing supply by cutting the tax bill for home sellers.

U.S. House of Representatives Jimmy Panetta (Democrat-Carmel Valley, Calif.) and Mike Kelly (Republican-Pennsylvania) introduced the More Homes on the Market Act in September. The bill has gained attention and support among lawmakers in recent months.

If approved, the act would exclude capital gains from home sales to $500,000 for single filers and $1 million for joint filers – double the current limit, which was established a quarter-century ago and not indexed for inflation.

With California’s fast-rising home prices – up $590,000 since 1997, and triple the median price from early 2008 – many homeowners avoid selling because of the significant tax bite. The More Homes on the Market Act would encourage more homeowners to sell since they would enjoy a much-smaller tax bill and have more equity to roll into another home.


The act would benefit many older homeowners who bought their homes when they had families but are now reluctant to sell because of the tax bill. If approved, these homeowners could sell their homes and buy a more affordable and smaller home, allowing another family to enjoy a larger house.

“Due to outdated limitations on home sale gain exclusions, homeowners who are looking to downsize are discouraged from selling their homes, which can stifle our real estate market and contribute to a lack of housing supply,” Panetta says. “Increasing this exclusion through the bipartisan More Homes on the Market Act will make it easier for homeowners to earn more from their investment, which will incentivize them to sell and increase the amount of homes on the market.”

The National Association of Realtors estimates that 95% of single homeowners and 68% of married homeowners who bought their homes before 2000 would face capital gains in California. And Californians stay in their homes longer than others in the U.S., likely because of the hefty prices (see next blog item below for more details).

CityMedian price Jan. 2013Median price Jan. 2023
San Jose$652,500$1.53 million
San Francisco$743,643$1.39 million
San Diego$390,890$824,950
Los Angeles$349,720$778,540

Source: California Association of Realtors

“This bill will provide necessary tax relief for California homeowners, particularly senior citizens, who have been unable to move because of the tax burden that could result if they were to sell,” says California Association of Realtors president Jennifer Branchini. “For working Californians, a home is their biggest and most important investment. However, because the capital gains exclusion was passed 25 years ago with no indexing for inflation, fewer and fewer families have been able to downsize and access the equity built up in their homes. This has resulted in fewer homes being available for younger and first-time homebuyers to move into, which has driven up demand and home prices even more.”

Record-low applications in much of California in the fourth quarter

Fast-rising mortgage rates have chilled the once red-hot housing market during the past year. And the deep freeze arrived in the fourth quarter, according to ATTOM Data.

Nationwide, mortgage applications plummeted to 1.52 million during the fourth quarter, a 24% decline compared to the third quarter – and off a stunning 55% from a year ago. It is the seventh consecutive quarterly decline and the latest evidence that The Federal Reserve’s effort to cool inflation with higher rates has dropped ice water on the market.

Many mortgage lenders, from the big banks to the mortgage-only companies, have been cutting staff, closing offices and some are even exiting the industry. Wells Fargo announced leaving the mortgage business a few months ago, only offering home loans to existing customers.

And California wanna-be buyers and mortgage lenders are getting hit hard. Eight of nine regions reported modern-day record-low mortgage applications during the fourth quarter, with San Jose and San Francisco off more than 70% from a year ago. All aspects of lending declined significantly, from new loans and refinancing to home-equity lines of credit.

CityMortgage loans in Q4 2022Decline from a year ago
Los Angeles 38,743-68%
San Diego12,355-69%
San Francisco15,936-72%
San Jose5,469-76%
Ventura County3,103-69%

Source: ATTOM Data

“The lending industry experienced a triple-dose of hits in the fourth quarter of last year as mortgage rates kept rising to levels not seen in more than 15 years and the U.S. housing market continued to stall after a decade of prosperity,” says Rob Barber, chief executive officer at ATTOM.