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Money, Insurance & Investments for Seniors
Survey of Home Owners on Values finds Vast Majority
of Senior Citizens Have No Home Mortgage
Seniors, as usual,
lest optimistic about values increasing
December 7, 2006 – As home prices cool, the Pew
Research Center surveyed homeowners to learn more about the impact of
shifting home values. The researchers discovered some not so surprising information
about senior citizens – as usual, they tend to be the most pessimistic about
values going up in the future. But, they also found one amazing
statistic and another that is at least surprising. The amazing fact – 72 percent of those ages 65 and older have no home mortgage.
And, surprisingly, more seniors own second homes than the average for all adults.
|
Senior citizens
are far more likely to own their homes - mortgage free. Only
32% of all homeowners, including seniors, are mortgage free,
while 72% of seniors enjoy this status. |
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Despite a record drop this past year in the median
sales price of existing homes, more than eight-in-ten homeowners expect
the value of their homes to go up either "a little" (55%) or "a lot"
(26%) in the future.
When asked if their home value would increase or
decrease in the years ahead, only 14% of seniors project it will
"increase a lot," while the next most pessimistic age group
was the
50-64 year olds, with 27% seeing a big increase. The average for all
adults was 26%.
In fact, 15% of seniors expect their value to
decrease, while the average of all adults was 10%.
However, the anticipated levels of future gains
are not nearly as great as the gains that homeowners say they've
experienced in recent years.
About twice as many homeowners (46%) say their
house increased "a lot" in value over the past few years as say they
expect similar increases in the future, according to a nationwide Pew
Research Center telephone survey of a random sample of 2,000 adults,
including 1,500 homeowners, taken from October 18 through November 9,
2006.
 Although
88% of all adults say their home value increased during the climb of the
last few years, only 79% of seniors feel they saw the same home value
appreciation. There was one age group that was lower than seniors on
this estimate - the 19-29 year olds, with only 71% thinking their value
increased.
Those whose homes are currently valued at $500,000
and above are nearly twice as likely as those with homes valued at less
than $250,000 to expect strong increases in the coming years. Note that
only 8% of seniors report living in a home valued at $500,000.
Among those who say their home is currently worth
$500,000 or more, some 68% say their home value has risen "a lot" in the
past few years. But just half that share – 34% – of homeowners whose
house is worth less than $250,000 say the same thing. By the same token,
homeowners with high annual incomes are more likely than those with
smaller annual incomes to say their home values have gone up a lot in
recent years.
Younger homeowners (ages 18 to 64) are about twice
as likely as older homeowners to see big gains in the future value of
their homes.
On the other side of the housing scale, those more
likely to report living in homes valued at less than $100,000 include
rural residents, and homeowners on either end of the age spectrum (ages
18-29 as well as those ages 65 and older).
According to the Pew survey, just under one in five
of all adults (18%) and 24% of all homeowners have a real estate holding
apart from the place where they now live – such as a second home or an
investment property.
 Not
surprisingly, those with higher family incomes and homeowners with
higher property values are more likely than others to own investment
property or second homes. The exceptions, as usual, are senior citizens,
with a surprising 19% saying they have a second home. This is slightly
above the average of 18%.
Other key findings from the Pew survey:
● As homeowners have seen the values of their
homes shoot up, many have converted some of this value into cash.
According to the Pew survey, some 20 percent of all homeowners currently
have a second mortgage or home equity loan. Those most likely to have
such loans include homeowners on the younger side (ages 30 to 49) and
homeowners with higher incomes and more valuable homes.
● Among homeowners with second mortgages or home
equity loans, fewer than half (45%) say they are using the loan money to
pay for home improvements or repairs. Another 14 percent volunteer that
they are using the money for a second home, a real estate investment or
a home purchase. The remaining respondents say the loan is paying for a
mixed bag of items: 11% say it is for credit card or other debt; 10
percent say it is for a car; 6 percent say it is for education; 2
percent say it is for business-related expenses and the remainder say it
is for other things or that they don't know.
● About a third of homeowners say that their home
accounts for "all or most" of their personal financial worth and another
third say it accounts for about half. These figures are unchanged from a
similar survey taken in 1992.
● Just under a fifth (18%) of all adults, and just under a quarter (24%)
of all homeowners, report owning a second home or other real estate
apart from the place where they now live. More than a third (36%) of
people with annual incomes of $100,000 and above report owning such real
estate.
● For the vast majority of American homeowners,
their home is their most important financial asset. Some 34 percent of
homeowners say their home accounts for "all or most" of their personal
financial worth and another 34% say it represents about half of their
worth.
 ●
People who live on the nation's coasts feel more flush about the rise in
the value of their home than do those who live in the nation's
midsection. Some 58% of westerners and 52% of northeasterners say their
homes have risen a lot in value, while just 39% of southerners and 41%
of midwesterners say the same thing.
● Suburbanites are a bit more likely that city
residents, and significantly more likely than rural residents, to say
the value of their homes has risen a lot in recent years. Also,
homeowners ages 50 to 64 are more likely than those both younger and
older to say they've registered big gains in the value of their homes in
the past few years.
>>
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