ShareAmerica’s population is increasingly aging: roughly one in three will be 55 years and older by 2060, up from about one in five in 2010.[1] What are the housing choices of the 55+ adult population?
In a presentation at the REALTOR® University Speaker Series held recently, Dr. Sean Becketti discussed the results of a recent study by Freddie Mac on the housing choices of the 55+ population, presenting information that either validated or disputed some commonly held notions or “myths” about the 55+ population.[2] Dr.Sean Becketti is Chief Economist and Vice-President of Freddie Mac.
To listen to the webinar[3], please click here.
Among the highlights of the study are:
1) Majority of the adult 55+ want to age in place. Approximately 63% of 55+ homeowners would prefer to stay in their current residence because they are satisfied with their community (56%) and their current homes (65%). However, nearly one in four (23%) of 55+ homeowners would need major renovations that will enable them to remain mobile and safe in their homes.
2) Only a minority want to downsize or retire to a warmer state. Only 20 percent cited downsizing as a “very important” reason for moving, and only 19 percent cited moving to a warm climate as a “very important” reason. The “very important” reasons when deciding to move and where to live are: affordability of living in a community (46%), amenities for retirement (44%), less maintenance (41%), and proximity to family members (31%).
3) Many of the 55+ are not financially prepared for retirement. Approximately 36 percent of those retired, and 57 percent of those still working, are still paying a mortgage. Of those, a majority still have 10 years on their loan. Only 20 percent of those in the workforce feel “very confident” they’ll be financially ready for retirement, and only 34 of those who are already retired say they “strongly agree” that they feel financially secure. Not surprisingly, confidence among both groups increases with income. And when the “somewhat confident” and “somewhat agree” groups are included, the picture looks rosier—well over half of each group expresses confidence regardless of income.
4) Approximately 20 percent of 55+ headed households have provided their children with money for a down payment.
Homeowners who have provided—or expect to provide—down payment assistance to their children was surprisingly small. In addition, relatively few reported receiving such assistance at all from their own parents. In fact, 15 percent of respondents indicated that they are unwilling to provide financial assistance although they are financially able to do so.
Dr. Sean Becketti is Chief Economist and of Freddie Mac. Prior to this, he was senior vice president and head of modeling and analytics of Flagstar Bank. His experience also includes senior executive roles with Washington Mutual and Wells Fargo in which he led research functions focused on mortgage markets and capital markets. Dr. Becketti also previously worked at Freddie Mac from 1996 - 2001 in several senior financial and analytical roles. Earlier in his career, he served as senior economist with the Federal Reserve Bank of Kansas City and as an assistant professor of economics at UCLA. Dr. Becketti holds master's and Ph.D. degrees from Stanford University and a bachelor's degree from University of California - Santa Cruz.
About REALTOR® University Speaker Series
REALTOR® University provides on-line education on real estate and other topics at the MBA and undergraduate levels. The REALTOR® University Speaker Series provides a venue to learn about and stimulate discussion of economic and real estate issues in support of NAR’s mission as the Voice of Real Estate. The Speaker Series presentations can be accessed on this webpage.
[1] Census Bureau projections.
[2] To find out more about this study and to collaborate with Freddie Mac on this research, please contact Anthony Hutchinson, Director, Government and Industry Relations, at anthony_hutchinson@freddiemac.com.
[3] Thanks to Meredith Dunn, Communications Manager, for recording and editing the webinar video.