Housing assets are still a dominant force in many older Americans’ retirement portfolios, reveals a report from the Mortgage Bankers Association’s Research Institute for Housing America.
Older Americans who own their homes are more financially secure and generally experience fewer impediments to good health than peers who rent, found Professors Michael D. Eriksen of Texas Tech University, Gary V. Engelhardt of Syracuse University, and Nadia Greenhalgh-Stanley of Kent State University in “A Profile of Housing and Health among Older Americans.”
“Owning a home provides the single largest asset in most Americans’ retirement portfolios, while renters have far more difficulty modifying their living space to adapt to any of the myriad physical ailments that tend to affect older people,” said Professor Eriksen in a statement. “Our report serves as a useful reference for all parties interested in the implications of housing on an aging society, a situation America now faces with large numbers of the Baby Boomer generation rapidly heading into retirement age.”
The study profiles the housing, functional status, and health status of the near old—defined as people aged 55-64—and older Americans aged 65 and older, using the most recent data available from the Health and Retirement Study, jointly produced by the National Institute on Aging and the University of Michigan.
“Housing demand over the next decade will be significantly impacted by the aging of the U.S. population. Real estate finance must also evolve to meet these changing needs, whether older Americans age in place and continue to own their homes, or whether they rent,” said Mike Fratantoni, Executive Director of RIHA, and Vice President, Research and Policy Development for MBA.
More than 47 million households in America are headed by people aged 55 and older. Of those, 80% are homeowners, and housing remains their dominant asset in retirement portfolios. Median housing equity for older American homeowners was $125,000, with 50% of the typical older homeowner’s portfolio composed of housing wealth.
Older renters face nearly double the number of limitations in their ability to conduct activities of daily living compared to homeowners, according to the study.
Nearly a third of older Americans (31%) have residences with special safety features, and 13% of respondents reported modifying their home between 2008 and 2010 to make them safer or more accessible.
Written by Alyssa Gerace