Older Americans Do Best in Hanging on to Home Equity

Older Americans experienced markedly smaller losses in home equity than younger ones, reports a Pew Research Center survey released today. Compared with their counterparts in 1984, older homeowners in 2009 had a substantial increase in the median value of their home equity, versus the younger ones who experienced a loss, Pew says.

While the average American household lost 22% of its home equity from 2005 to 2009, the drop was sharpest for homeowners younger than 35, according to “The Rising Age Gap in Economic Well-Being” report. For the younger demographic, homeowners saw an average loss of 51%, from $50,258 in 2005 to $24,396 in 2009. In contrast, those homeowners aged 65 and older were “relatively untouched,” Pew says, seeing only 7% declines on average from $156,359 to $145,361 in the same time period.

Looking at the long term impact on home equity, the oldest homeowner households have seen the largest rises in home equity versus same-age counterparts in earlier decades, Pew says. The demographic to fare best was the 65+ population, with those in the 55-64 age group also seeing home equity appreciate over the last 25 years.

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Written by Elizabeth Ecker

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  • The study is interesting but not very meaningful.  It claims it took all dollar amounts and expressed them in 2010 dollars.  But what does that mean?  Were the conversion rates based on housing or did they include the cost of gasoline?

    There is little news in the information just an interesting level of comparison — home equity in 1984 to 2009.  The last major collapse of the housing market before this century was two years after passage of the 1986 Tax Reform Act.  This is like comparing home equity levels in early 2005 to 2009, interesting but not helpful.

  • If this information is provided to slow seniors in the process of surviving retirement? I fail to see the application. So, all of us have less home equity. Seniors have more than boomers. Nobody is predicting a return to previous levels of home equity. The market is pretty much stuck where it is for awhile. Now what? Is this intended to dampen RM sales? RMs are about retirement survival aren’t they? If the Wall Street Casino crashes, some people lose they money for ever but nobody suggests we shut down that market. We survive best we can with what we have. An RM can be a great support tool in all kinds of circumstances. People have equity in their homes. They can use it since it belongs to them. Let freedom ring!

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