A new report from Harvard University’s Joint Center for Housing Studies reveals emerging trends for America’s senior population, as well as notable implications for the future of the reverse mortgage market.
The market for home equity solutions appears to be growing, based on the findings from the 2018 edition of Housing America’s Older Adults. Among the findings in the report, there are now 65 million households in the United States headed by people age 50 and older, which amounts to 55% of the nation’s households. The vast majority of those households—79%—own their homes.
Yet the financial picture of the oldest Americans looks better than those who will soon enter retirement, the study found, with 50-64 year olds lagging behind their older counterparts when it comes to wealth and income gains. During the time between 2011 and 2016, median household income rose 9.6 percent for those aged 65-79, while it rose 5.2 percent for those aged 80 and over. Comparatively, income for those in their 50s and early 60s rose just 2.6 percent.
Net worth figures showed a similar picture. From 2013-2016, the net worth of households aged 80 and over grew 41 percent, while those in the age 50-64 range grew just 15 percent.
But housing costs are also contributing to the financial drag, Harvard reports, with nearly 10 million older adults finding themselves financially burdened by housing costs. In 2016, 9.7 million households age 65 and over, accounting for nearly a third of all households in this age group, spent more than 30 percent of their income on housing.
Cost burdens and age rise in tandem, according to the report. In 2016, 36 percent of households aged 80 and over faced cost burdens compared to 31 percent of those 65-79, and 29 percent of those 50-64. Between 2006 and 2016, payments from Social Security rose 6 percent, while median rent for those aged 65 and over rose at 12 percent.
View the full report by clicking here.
Written by Chris Clow