Baby Boomers Turn to Home Sales to Unlock Housing Wealth

Faced with empty nests, an improving housing market and retirement looming on the horizon, Baby Boomers are increasingly looking toward their homes to unlock wealth, but it doesn’t appear that reverse mortgages are a consideration just yet.

Home sales data and other anecdotal evidence are suggesting that more Boomers are selling their houses this year in efforts to unlock the equity they’ve regained since the housing downturn, according to a recent article from The Wall Street Journal.

The median age of home sellers has been on the rise since 2009, increasing from age 46 to 54, in what could be an indication that older homeowners who may have been waiting for a housing market recovery are now beginning to list their properties, according to data from the National Association of Realtors cited by WSJ.

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As Boomers put for-sale signs in their yards, this not only has implications for the greater housing market, but for their retirements as well.

“Although investors have been told for years not to think of their primary homes as investments, having a healthy chunk of home equity can make a big difference when it comes to planning retirement finances,” writes WSJ.

Liquidating real estate assets can be a viable solution if retirement savings present the risk of a shortfall, said Christine Benz, director of personal finance at Morningstar, Inc., in the article.

“That’s more palatable than hearing you need to keep working until you’re 72,” she said.

Even so, while the article makes repeated references to the viability of unlocking housing wealth through home sales, and the potential retirement benefits that can be reaped as a result, it does not mention the prospect of potentially using a reverse mortgage to accomplish this same purpose.

Read The Wall Street Journal article.

Written by Jason Oliva

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  • Reverse mortgages are far from universal acceptance as a solution to concerns about running out of cash in retirement although efforts in that direction have proven to gain significant ground.

    Even though positive articles are being published on Forbes website, weeks after posting, the number of views are less than 500. In one day earlier this month a tax article was posted and within 24 hours the post had hundreds of thousands of views. To say postings on reverse mortgages (even on Forbes website) have yet a ways to go is very big understatement.

    Without more traction, few will consider our solutions all that relevant. We simply lack the marketing muscle to put us in more of a position of acceptance.

    • Agreed. We in the industry see the recent surge in positive press as a “watershed event”, but it will not be so until people – both consumers in the main-stream and professionals in the trades – start reading the articles in anything approaching significant numbers.

      In the meantime, it is up to us to push this information out.

  • Both comments by Jim Veale and REVGUYJIM are true up until now, we still have to look on the positive side of the curtain.

    There are a lot of statistics out there in our favor. We have a lot of Trees in the forest to go toot our Horn to, real loud!

    We do have to go out there and push the HECM and educate the public and others in the financial industry. Who said life was going to be easy or that business was going to walk up to us and say, here I am!

    We must capitalize on the surge of positive advertising, capitalize on the new founded credibility our product has due to the FA ruling. We have a larger market than ever before and the financial community is starting to listen to us for a change.

    If we all go out there and push like REVGUYJIM said, we can pick up the endorsements, we can push those numbers up and at the same time, look at all those seniors we will help in doing it!

    John A. Smaldone
    http://www.hanover-finacial.com

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