Owning a home is a significant milestone for many Americans and it can be an even more important asset during retirement. As we age our housing needs and priorities may change, and understanding the trends in homeownership among retirees can help us plan for our own financial future.
This article will examine the most recent data on retiree homeownership, the variables that affect their choice to remain in their current residences or move, and the effects on the housing market as a whole. We’ll also look at the opportunities and potential difficulties that retirees may encounter as homeowners, and we’ll provide advice on how to deal with them.
Let’s dive in!
The Big Picture: Homeownership Among Retirees
According to a recent Bank of America survey a whopping 70% of Gen X and Baby Boomers plan to or have already retired in the home they currently own. This statistic highlights the strong preference among older Americans to age in place, enjoying the familiarity and comfort of their existing homes.
Several factors contribute to this trend:
- Financial considerations: For many retirees, their home represents their largest asset and source of equity. Selling their home could mean giving up a significant financial cushion, especially in today’s uncertain economic climate.
- Emotional attachment: Homes hold memories and a sense of belonging, making it difficult for many retirees to part with them.
- Accessibility and convenience: Staying in their existing homes allows retirees to maintain their established social networks, access to familiar amenities, and proximity to family and friends.
However not all retirees choose to remain in their homes. Some may opt to downsize to a smaller more manageable property, while others may relocate to be closer to family or pursue a different lifestyle.
According to a LendingTree study, the share of homeowners aged 65 and older with a mortgage varies significantly across different metropolitan areas. In San Diego, Miami, and Las Vegas, over 23% of older homeowners still have a mortgage, while in Salt Lake City, Austin, and Dallas, the share falls below 14%.
These variations can be attributed to factors such as housing costs, local demographics, and economic conditions. Understanding these trends can help retirees make informed decisions about their housing options.
The Impact on the Housing Market
The high percentage of retirees staying in their homes has implications for the overall housing market. With fewer homes available for sale, the supply of housing may not keep pace with demand, potentially leading to rising prices and increased competition among buyers.
The availability of affordable housing options for younger generations may also be impacted by this trend. The supply of starter homes may decrease as older homeowners stay in their properties longer, making it harder for first-time buyers to enter the market.
However, the aging population also presents opportunities for the housing market. Rehab and accessibility services are in greater demand as retirees try to make changes to their homes to suit their evolving needs.
Furthermore, a market for specialized housing options like senior living communities or age-restricted developments may be created by the growing number of older homeowners.
Challenges and Opportunities for Retiree Homeowners
While owning a home in retirement offers numerous benefits, it also presents challenges. Updating a home can be expensive and physically taxing, particularly for retirees living on a fixed income.
Retirees may also face challenges in keeping their homes updated and accessible as their mobility and health needs change. Additionally, property taxes and insurance costs can increase significantly over time, putting a strain on retirees’ budgets.
However, there are ways for retirees to overcome these challenges and maximize the benefits of homeownership. By planning ahead and making informed decisions, retirees can ensure that their homes remain comfortable, affordable, and accessible throughout their retirement years.
Here are some tips for retirees who want to stay in their homes:
- Plan for future expenses: Estimate your future housing costs, including property taxes, insurance, maintenance, and potential repairs.
- Consider downsizing: If your home is too large or requires too much maintenance, consider downsizing to a smaller, more manageable property.
- Make your home accessible: Install grab bars, ramps, and other accessibility features to make your home safer and easier to navigate as you age.
- Explore financial assistance programs: There are government programs and non-profit organizations that offer financial assistance to help retirees with homeownership costs.
Homeownership plays a significant role in the lives of many retirees. Understanding the trends, challenges, and opportunities associated with homeownership in retirement can help individuals make informed decisions and plan for a secure and comfortable future.
As the population ages, the housing market will need to adapt to meet the evolving needs of older homeowners. By addressing the challenges and embracing the opportunities, we can ensure that homeownership remains a viable and rewarding option for retirees in the years to come.
Other statistics on the topicMillennials homeownership in the U.S.
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Homeownership rate in the United States as of 3rd quarter 2021 and 3rd quarter 2022, by age
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United StatesSurvey time period
Q3 2021 and Q3 2022Citation formats
Here’s Why Owning a Home in Retirement May Be the Wrong Choice
FAQ
What percentage of retirees have mortgages?
Do most retirees own their home?
How many 65 year olds still have a mortgage?
What percentage of retirees are debt free?
What percentage of people own a home?
About 39 percent of the people in this age group owned a home during this period. In contrast, almost 79.5 percent of those aged 65 and older owned their home. The homeownership rate is the proportion of occupied households which are occupied by the owners.
Which cities have the most retirement-age homeowners?
In 2019 — before the pandemic — Miami had the largest share of retirement-age homeowners, while Las Vegas was fourth and San Diego was seventh. Salt Lake City, Austin, Texas, and Dallas have the smallest share of 65-and-older homeowners with a mortgage. An average of only 13.91% of homeowners who are 65 and older have a mortgage in these metros.
How much do older people spend on housing?
Accessing home equity can be a useful financial tool for some older homeowners to age in place. Older adults aged 65+ spend on average $17,500 annually in housing-related expenses. ( Bureau of Labor Statistics, 2019) 4.9 million older adult households spent nearly half of their income on housing in 2016. ( Joint Center for Housing Studies, 2018)
What percentage of over 65s own their home?
Using Grattan Institute modelling, we find that on current trends, the share of over 65s who own their home will fall from 76% today to 74% in 2026, to 70% by 2036, 64% by 2046, and 57% by 2056.