There has been a tendency in recent decades to view the home equity as yet another financial investment.
Waiting out the recession was tough for many, as jobs were scarce and defaults became rampant. However, for seniors that were able to endure the recession and hold on to their homes, there may be a light at the end of the tunnel. Property value to the rescue!
Over 70% of Americans over the age of 65 are homeowners. Seniors now hold a huge stake in the countries home equity, a whopping $5.83 trillion to be exact, which is 16% more than the pre-recession peak. See link.
Over the years, these senior home owners have poured money into many real estate property value improvements:
- landscaping to add more curb appeal
- routine maintenance leading to upgrades in heating/cooling efficiencies
- appliance replacements yielding space optimization
- renovations adding heated & cooled space to the square footage
Combine these property improvements with inflation and local real estate market trends. It is clear to see that there is a lot of potential increased property value.
Property value has increased significantly over the decades
As retirement approaches for many, relying on savings, pension and social security is not always enough. But despite this issue, many seniors are finding that the large amount of equity held in homes will provide a fourth leg to prop up the table. Seniors are finding new financial flexibility with reverse mortgages as well as home equity lines of credit (HELOCs).
Moreover, with an increase in home equity, seniors can now comfortably know that they have something to lean on when savings and pensions don’t suffice. Selling a home that is too big and moving into something to better suit your leisurely lifestyle can bring in a lot of money into a retirement fund. Thus, making life much more enjoyable.