Skip to main content

Older Homeowners Want To Age In Place But Are Averse To Extracting Equity: Fannie Mae

By and large, homeowners who are 60 and older love where they live and have a preference to age in place. They may also see the equity in their homes as a “financial reserve” and are generally confident in their retirement plans, but they are far less interested in employing their home equity in retirement.

This is according to Doug Duncan, chief economist at Fannie Mae, in a new blog post that explores the homeownership patterns of older Americans.

“In 2022, Americans aged 60-plus represented 29% of the adult population and 44% of homeowners,” Duncan wrote. “In the next decade, the 60-plus population is forecast by the Census Bureau to increase to 32% of the total adult population.

“If household formation and ownership rates remain unchanged from 2022 levels, the change in population levels alone would mean the 60-plus population could approach nearly half of all homeowners in the next decade.”

The size of the cohort led Fannie Mae to explore some of the implications it could create for the prospect of U.S. homeownership. The government-sponsored enterprise (GSE) conducted a research project consisting of 1,141 older homeowners in April 2023.

“Approximately two-thirds [of the respondents] were already retired, and, of those still working, a majority planned to retire in the next five years,” Duncan wrote.

“All were asked about their financial plan for retirement and the role they expect their home to play in that retirement. An additional group of 307 older homeowners with lower incomes and lower amounts of retirement assets and savings were also surveyed to understand the differences in attitudes and needs among older homeowners facing greater financial constraints.”

Before fielding the survey, Fannie Mae conducted a series of in-depth interviews with 25 older homeowners for “deeper insight into their motivations and attitudes, and to better inform the survey work.”

The GSE discovered that 72% of respondents are confident about their income in retirement, while economically disadvantaged older homeowners were less confident at 55%.

Additionally, a majority (56%) said that they plan to never sell their home, preferring to age in place. Only 17% said that they either have, or planned to, sell their home.

Less encouraging for reverse mortgage professionals is the point about whether or not older homeowners plan to employ their equity in retirement.

“Only 15% said that they would consider using their home’s equity for extra funds needed during retirement, and economically disadvantaged owners felt similarly,” Duncan wrote.

No Comments yet!