Reverse mortgages offer realistic solution to U.S. Aging in Place Crisis
The Joint Center for Housing Studies of Harvard University has published a 98-page document examining housing concerns and solutions for an aging population. As the U.S. population shifts with baby boomers entering retirement age, older homeowner numbers are beginning to increase rapidly. Many homeowners will prefer to live at home and age in place rather than utilize senior and assisted living facilities. Aging in place comes with unique challenges that need to be considered. Many of these challenges require financial expense, and the reverse mortgage can become a realistic solution that helps to alleviate the burden of these costs. A reverse mortgage may offer the opportunity to enjoy retirement in your own home rather than having to move, according to a recent report published by the Joint Center for Housing Studies of Harvard University.
As the population ages we will see overall lower incomes coupled with increased housing expense, providing an opportunity for the reverse mortgage to be used strategically and to offer a solution for older homeowners. “For those [homeowners] with mortgages they cannot afford but who still have substantial home equity, reverse mortgages may make it more financially feasible to age in place,” the Harvard report states.
Home equity will be the biggest asset of most baby boomers as they proceed through retirement, but the number of people accessing it to stay in their home is still relatively low. “There are a fair number of older adults who have the financial resources to keep up in retirement, but there are more adults with moderate to low funds,” Jen Molinsky, senior research associate at the Harvard Joint Center for Housing Studies and lead author of the report, told Reverse Mortgage Daily.
“Housing wealth can provide a valuable safety net for older households who have exhausted other financial reserves, through second mortgages, reverse mortgages, or home sales,” the report states. “However, survey evidence indicates the use of home equity to finance retirement is seldom an explicit plan.”