Study: Senior Homeowners Largely Stable Enough to Tap Home Equity

A new research working paper released by the Boston College Center for Retirement Research reveals not only that the majority of seniors’ preferences is to remain in their homes as they age, but that a majority of homeowners experience enough residential stability to tap home equity through either reverse mortgages or property tax deferrals.

As senior life expectancy grows and the necessity rises for additional spending on medical care, many seniors may find themselves needing to pursue alternative forms of financing in order to make ends meet in retirement. Many seniors are unwilling to explore tapping their home’s equity either with a reverse mortgage or a property tax deferral, though, since the end result of these arrangements is debt compounded by interest.

Because of this, the new research paper examines, “typical housing trajectories in retirement and explores how often, and for whom, tapping home equity would be a viable strategy,” the paper’s abstract reads.


Despite the fact that retirees require additional money in retirement – and have the need for additional money, enough equity to tap into and the desire to stay at home – many still avoid borrowing against their home either because of the complexity of an equity release product like a reverse mortgage, or a desire to avoid liens on something they may wish to leave to heirs: the home.

“But a more fundamental concern may be the fear that, despite their desire to age in place, they may want to move and be forced to pay back outstanding loans with interest, leaving them with inadequate resources at a vulnerable time in their life,” the paper reads.

Using Health and Retirement Study (HRS) data collected between 1992 and 2016, the research finds that 70% of households have “very stable homeownership patterns,” even across multiple decades. 53% of those studied either stay in the home they own in their 50s, while 17% purchase a new home around retirement and remain in it for the remainder of their life.

In total, the research reinforces that seniors desire to age in place, and will likely relocate only in response to some kind of shock taking place.

“The overall conclusion is that most homeowners experience enough residential stability to tap home equity through products and programs like reverse mortgages and property tax deferrals,” the paper concludes.

Read the working paper at the Boston College Center for Retirement Research website.

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  • This is another good article that points to many of the problems in getting seniors to accept the reverse mortgage of today.

    True, a reverse mortgage is NOT for everyone, but it is for many! Educating our seniors on what a reverse mortgage is truly the key to what it all about!

    Gaining trust, discovering the need and explaining in detail how a reverse mortgage can benefit our seniors along with plenty of patients is the key. However, in order for a loan originator to have these tools, he or she must posses certain characteristics with in themselves.

    Not only what I just described, but loan originators need to be thoroughly educated and trained on their product. Companies need to spend more time and money on these resources to offer their originators or it will not work, period!

    John A. Smaldone

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