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34 WHY HOMEOWNERS WON'T MOVE Homeowners are staying in their homes longer and longer, according to First American Chief Economist Mark Fleming. ese 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." e increased tenure in homes may be due to a number of factors, 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 current rate of 4.6 percent is considerably less attractive. As for supply, as these "homebodies" worsen the inventory problem, they are also impacted by it. "As the supply of homes for sale increases, the risk of not being able to find something to buy falls and homeowners become more confident in the decision to sell," Fleming said. "Today's significant lack of supply is preventing homeowners from selling and driving tenure length up." Despite the highest levels of tappable equity in history, homeowners 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 foreclosure and tight credit increasing homeowner tenure to the highest level in 18 years, and there is currently no end in sight. "While it is unlikely the influences 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." UPS AND DOWNS IN HOME FLIPS Home flipping has never been an undertaking for the faint-hearted, said Lance Lambert, Data Journalist at Realtor.com who shared in a recent report that the business of flipping homes is getting riskier again on account of the current slowdown. According to Lambert, this trend is "raising stress levels and blood pressures anew," with the decline in prices in a few cities. e risk of rapidly falling prices is likely to affect flippers as they would end up losing value on their homes, even as they work to improve them, the report indicated. It also stated that figuring out areas where home U.S. home flipping is up—and down—the most, is not only significant to would-be flippers but also is a critical aspect of predicting the direction of key markets. e report found that larger coastal cities recorded the biggest drop in flips wherein prices are slowing down and the costs far outpaced what buyers could afford. A spike in flips was reflected in smaller places and more affordable cities with an influx of new residents, the report stated. Las Vegas and Phoenix—some of the areas where this sort of speculative real estate investment contributed most to the last bubble, is booming again, according to the report. Home-flipping profits have gradually shrunk, from returns of 42 percent over purchase prices down to 38 percent over the past four years—a drop that excludes renovation and remodeling cost, which can surpass 20 percent of the purchase price on the rise in many areas. Realtor's home sales analysis points out the growth of the overall number of flips by 3.5 percent in September compared with a year earlier. Raleigh, North Carolina topped the list of metros where flipping is up the most with a median home price at $340,000 and a recorded increase in home flips at 63.4 percent. Purchase and sales reflected a difference of 32 percent. is was followed by Charlotte, North Carolina; Orlando, Florida; Phoenix, Arizona, and Las Vegas, Nevada. Metros such as Columbus, Ohio; Cape Coral, Florida; Virginia Beach, Virginia; Riverside, California, and Portland, Oregon featured in the top five metros with the lowest rate of flipping respectively. e report is based on information derived from home sales in the 200 largest metropolitan areas for July, August, and September 2018 and compared them with the same period a year prior. Home flip, per the report, is any type of home bought and resold within a three- to 12-month period.