Golden Handcuffs

Moving residences is a large driver of self storage demand.

A recent survey by Extra Space Storage, found that customers reported moving as the most common reason they use storage.

‍

With that in mind, we like to pay attention to existing home sales statistics to understand better what’s happening with storage demand.

As you can see below, existing home sales declined over 50% from 2023 to 2024, which is also significantly below levels seen over the prior 15 years.

‍

What is causing moving activity to be so low?

Homeowners have "golden handcuffs." Currently, 57% of homeowners have locked in mortgage rates below 4%, while mortgage rates have remained over 6% for the past two years. As a result, those with low mortgage rates are only moving if absolutely necessary.

Additionally, those renting but wanting to buy a home can’t because of the affordability issues associated with high mortgage rates.

With interest rates starting to decline, mortgage rates will likely follow. We believe a drop in mortgage rates will spark moving activity and ultimately renew storage demand.

‍