Data from the 2009 American Housing Survey (AHS) shows that while the number of people using reverse mortgages has increased dramatically, there is still plenty of opportunity for growth.
Conducted by the US Census Bureau for the Department of Housing and Urban Development (HUD), the survey data shows that the number of homeowners using reverse mortgages in 2009 increased 59% to 252,000 from 159,000 in 2007.
“This important survey provides us a clear picture of the American home and its occupants,” said Dr. Raphael Bostic, HUD’s Assistant Secretary for Policy Development and Research. “The housing crisis makes clear the need for continued collection of high quality housing data to help us understand housing markets. The numbers behind this survey not only provide valuable information on the composition of our housing stock, but they also help us monitor the mortgage markets, measure worst-case housing needs, and inform our policy choices.”
The data from the survey also provides interesting insight into the reverse mortgage demographic. According to the AHS, the number of seniors without a mortgage balance remains incredibly high. Of the respondents 65 and older, those without a mortgage balance fell 3% to 12.07m in 2009. Of the seniors with a mortgage balance, the average loan to value is 37%.
The data also shows that seniors are living off of very limited income and it continues to shrink. According to the AHS, the average annual income for those 65 and older fell from $27,306 in 2007 to $27,000 in 2009.
This comes at a time when many states are expected to cut home care services for the elderly according to an article from the New York Times. Since the start of the recession, at least 25 states and the District of Columbia have curtailed programs that include meal deliveries, housekeeping aid and assistance for family caregivers, according to the Center on Budget and Policy Priorities.
How seniors will be able to pay for the care isn’t clear, but a reverse mortgage could be one solution that allows them to remain in their home.