Home Ownership: A Dream Turned Nightmare for American Seniors
"If you want to conquer fear, do not sit home and think about it. Go out and get busy." — Dale Carnegie
America is facing a housing affordability crisis that’s sidelining countless would-be homebuyers. But there’s another affordability crisis—one that threatens millions of older Americans with the loss of their homes, even if they’re fully paid off. This is truly tragic!
A Devastating Scenario for Seniors
Imagine this: You’ve retired with a modest nest egg. Your home is paid off, and life has been smooth for a decade. Then, tragedy strikes. Your spouse passes away, reducing your household Social Security income. At the same time, your investments take a hit, and your homeowner’s insurance and property taxes nearly double. With dwindling retirement savings suddenly, you’re staring down the possibility of losing the home you worked so hard to pay off.
A recent study from Bankrate found that the hidden costs of owning and maintaining a single-family home in the U.S. now average over $18,000 each year for property taxes, insurance, maintenance, and utility costs.
Sadly, property tax foreclosure stories are increasingly common in the media. The Washington Post ran a series of articles in 2013 about D.C. residents—many of them elderly and low-income—who had lost their homes over tax debts as low as $134. Talk about an abusive government stealing one’s accumulated home equity.
Thankfully not all municipalities are this heartless when collecting property taxes. Today more states and local governments are offering tax credits and repayment programs to help seniors keep their homes.
The Rising Costs of Aging
"The cost of housing and everything is getting higher,” said Marcy Thompson, vice president of programs and policy at the National Alliance to End Homelessness, quoted by Business Insider. “And that’s especially true for older people who are on fixed incomes.“
For many, this fear becomes reality as they spend-down their savings. A quick review of their assets often confirms the worst: their situation is not sustainable. Tragically, this leaves many seniors facing homelessness during their most vulnerable years.
The Unspoken Housing Crisis
Such a scenario is sadly not uncommon which is further compounded by chronic illness. These factors have created a pandemic of housing insecurity for older homeowners– the unspoken housing crisis.
Peyton Whitney, a researcher at Harvard University’s Joint Center for Housing Studies, recently presented findings on this issue. In a paper co-authored with Samara Scheckler and Jennifer Molinsky, Whitney highlighted a key challenge:
“Nearly 70% of adults aged 65 and older will need to purchase long-term care services at some point in their lives,” the report explains. “Yet their ability to afford this care is constrained by high costs and limited public assistance.”
Barriers to Home ownership for Seniors
Let’s take a step back. For most seniors, buying a first home today is out of reach. The math simply doesn’t work. Instead, many older buyers are “right-sizing” into a new home using proceeds from selling their previous home—sometimes with the help of a HECM for Purchase.
So, what options do older homeowners have to stay afloat? Home ownership as a Safety Net. A study from American University found that home ownership can be a powerful buffer against rising costs. The study noted, “Seniors who became homeowners were able to preserve more wealth as their liquid savings declined.”
A Call to Action
This is where reverse mortgage professionals and senior advisors could help. They can help address the growing challenge of covering daily expenses—and the costs of keeping a roof over one’s head by utilizing housing wealth.
America is facing a housing affordability crisis that’s sidelining countless would-be home buyers. But there’s another affordability crisis—one that threatens millions of older Americans with the loss of their homes, even if they’re fully paid off. This is truly tragic!
Find Out How You Can Use a Reverse Mortgage to Take Advantage of these Benefits:
No Mortgage Payments Tax-Free MoneyBills Paid Cash on HandIf you are 62 or older and you own a house you can take advantage of these benefits. Contact Cynthia today to learn more about Reverse Mortgage benefits. Worry Less. Live More.
