AARP: Housing Costs May Force Seniors Out of Homes

Housing costs are becoming more burdensome for older adults, to the extent that they’re hampering senior homeowners’ ability to age in place, finds AARP’s State Housing Profiles 2011 report.

“Although many older people desire to age in place, rising property taxes, utilities and maintenance costs or falling incomes may make that goal more difficult,” said Rodney Harrell, from AARP Public Policy Institute, in a report summary.

The report tracks housing costs for older adults between 2000 and 2009, and shows an increase, often unsustainable, in the amount homeowners are forced to spend on housing.

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Housing costs pose a significant burden for homeowners still paying their mortgages, and nearly half 65+ homeowners, at 48%, spend at least 30% of their incomes on housing, which qualifies them as “burdened.”

These senior homeowners are more likely to be retired and to have lower incomes, said Harrell, which makes housing costs that much more of a burden. Even homeowners without mortgages can be burdened, as costs for 17% of those 65 and older are considered past the threshold of housing cost burden.

The number of 50+ homeowners who own their homes outright dropped to 38% in 2009, down from 40% in 2000. And, while a majority of 65+ households, at 54%, own their homes free and clear, 26% are still saddled with mortgage payments.

A reverse mortgage could be the answer for those wishing to age in place, but experiencing financial difficulties; it would allow many of those senior homeowners to pay off existing mortgages and significantly improve monthly cashflow.

The report lists characteristics and housing cost burdens state by state, and shows the increase in the number of households with reverse mortgages from 2000 to 2009, comparing each state’s volume with national levels.

View AARP’s State Housing Profiles 2011 here.

Written by Alyssa Gerace

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  • RM’s are of course a great soluton to some that are in this situation, but not all, which is one of the reasons why we need HUD to issue guidelines for underwriting T&I.  Also, homeowners should take a comprehensive approach to their financial situation to reach the best solution, which is another reason why a professional with a complete tool box is best suited to help.

  • Lance,
     
    If you stopped at “solution,” I would have absolutely agreed with you.  The last phrase is problematic.  What is a “complete” tool box?
     
    Fee based professionals have all they need.  You obviously are talking about some type of salesperson.  Are you saying that those with both insurance and securities should be allowed to originate HECMs?  Are you saying it should be OK for either?  That last phrase is far too vague.

    As to HECMs, the laws seem adequate as they are.  Except for state laws, what prohibits a professional from completing “the tool box” right now with proprietary RMs?

    Z  

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