Mortgage Status Among Homeowner Households Age 62 and Older
% of Homeowner HH
Regular mortgage plus home equity loan
Home equity loan only
No home loan
Source: American Housing Survey, 2007
Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute, said "... Retirees need a new framework for thinking about how home equity can help assure their financial security and enable them to age in place without fear of running out of money."
The study finds that 35% of older Americans see their homes not just as places to live, but also as collateral for a loan. 14% are taking cash out of their house through a home equity loan or reverse mortgage. Older homeowners are using home equity to increase income security, enhance financial resilience to deal with unexpected expenses, and to improve debt management, among other things
This is a growing reality for affluent households who seek to enhance their lifestyle, as well as middle-income families for whom it may be their only choice.
Attributes of Homeowner Households Age 62 and Older, by Wealth Status
House-rich and cash-rich
House-rich or cash-rich
House-rich and cash-poor
House-poor and cash-poor
Median Household Values
Age of householder
Other Household Demographics
Has a college education
Householder worked last week
Homeowner households age 62+
% of total households (21.75 million)
Source: National Council on Aging (NCOA) calculations based on data from the American Housing Survey, 2007.
The study highlights different options for using home equity that are not part of the current national conversation. These include:
"With the right guidance and policy protection, reverse mortgages can be an important financial option for Boomers who do not have adequate savings." said Timmermann. The report emphasizes that consumer education must be part of any new efforts aimed at increasing the use of reverse mortgages.
The full study, Tapping Home Equity in Retirement: The MetLife Study on the Changing Role of Home Equity and Reverse Mortgages, and The Essentials: Reverse Mortgages, are available here under "What's New."