Studies show that older Americans in the 65 to 74 age group have the highest percentage of home ownership. This has provided valuable support to the American housing market in the last several years and is important for factory-built housing sellers too.
If studies like the one done by Foremost Insurance on manufactured housing (MH) are any indicators, it has long been a key demographic group for the factory built home industry.
Seniors will be equally important to home sales or more so in the future too.
According to Bloomberg News, “Older homeowners have been the pillar of the housing market following the collapse in 2008. The homeownership rate for Americans age 65 and over has remained at 80 percent while dropping for every other age group.”
Bloomberg also explains to MHProNews that the reason for this seems to be that most seniors have less or no mortgage debt compared to younger homeowners. They also have more wealth than they had four years ago, and longer lifespans than a generation ago. This combination of factors has resulted in many seniors being able to stay in the housing market.
Other reasons are that people in this group were less likely to experience a job loss since many were retired, and they were also positioned to reap gains in the rising stock and bond markets. The median net worth for those 65 to 74 increased 5 percent to $232,100, the biggest gain for any age group, from 2010 to 2013, according to the Federal Reserve’s Survey of Consumer Finances.
Because home prices have increased 21 percent since 2012, more older Americans are able to sell and buy another home.
Data from the National Association of Realtors shows that the largest segment of home buyers in 2014 was the 65-to 74-year-old group.
While some older homeowners like Bill Braswell are staying put in their present homes, others are opting to downsize and possibly move to a warmer climate. Braswell plans to stay in his 4-bedroom Tudor home in Virginia, although he could sell it for 10 times what he paid for it in 1980.
Others like Michael Jay, a New England radiologist who retired this year at age 64, traded heating bills and Massachusetts state income taxes for a three-bedroom house on a Florida golf course. He also liked the fact that Florida has no state income tax.
In addition to the sale of pre-owned homes, the new home market is also benefiting from sales made to older Americans who have had decades to build wealth and credit histories. They are helping to prop up new home sales while younger people have been putting off homeownership, a trend some believe will change starting in 2015.
“Everybody’s best-selling projects are those catering to older buyers,” John Burns, a housing consultant based in Irvine, California, said. “It’s really going to happen all across the country.”
Such facts spell opportunities for MH professionals, because over 10,000 boomers are retiring daily. ##
Related OpEd, Here comes the Senior Tsunami!
(Photo Credit: SelectGroupRE)
