No wonder some agents are singing the blues these days despite home prices and the number of homes sold skyrocketing in certain parts of the country. Overall, homeownership rates have dropped from 71% to 63% in the last decade, according to Gallup’s very latest Annual Economy and Personal Finance Poll.
Specifically, younger and low-middle income Americans and those living in the West are bearing the brunt of those lower homeownership rates. A 10% drop in homeownership for those 18-29 years; a 12% drop for those earning less than $30,000./year; and, an 11% drop for all ages and incomes in the West. Even upper income Americans (+$100,000./year) who have had a traditionally high homeownership rate have dropped below 90% since 2009.
But agents, pay attention. Seniors are immune to these declining rates, according to Gallup. Homeownership for Americans 65+ years has gained from 81% pre-recession to 82% in the last five years. Why? Seniors “…have had many years to work to save for and purchase a home and…” have either (almost) paid off their mortgages or they have already downsized to smaller properties. “…They no longer…pay substantial monthly mortgage payments…and (significantly) seniors are better off financially than younger age groups.”
From 2001-2009, 46% of senior households were considered to be low income households whereas from 2010-current, 33% senior households are considered to be low income households. This 13% drop is substantial. Seniors are more able to afford a home than younger age groups and they are “…less tied to receiving regular and substantial paychecks to afford a home…” As a result, seniors are the only major demographic that is essentially unaffected by the recent bursting of the housing bubble and the economic downturn.
Gallup says, “If they (seniors) own their home outright, volatile home values, higher unemployment and/or changes in lending practices do not affect them.” If, on the other hand, a person 65+ years who still owes on a mortgage and who does not have the financial resources to remain in his/her home may have to do what members of other age groups have to do…rent or move in with relatives.
