Boomers own the most homes in America. Here’s why

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Mortgages are the largest debt owned by many Americans, which is why it’s often recommended that homeowners pay off their balances before they retire. That way, homeowners will have more money freed up and less debt to worry about in retirement.

But paying off a mortgage before reaching retirement age isn’t feasible for everyone. In fact, across the country, nearly 10 million homeowners paying off their mortgage are 65 and older.

To better understand where homeowners are likely to still be paying off their mortgage once they’re near or past retirement age, LendingTree used U.S. Census Bureau data to look at the share of homeowners who are 65 and older and still have a mortgage in each of the nation’s 50 largest metropolitan areas.

We found across these 50 metros that an average of nearly 19% of homeowners who are 65 and older still have a mortgage. Beyond that, we also found that homes owned by people in this age group tend to be less valuable than those owned by the general population — and that their monthly housing costs tend to be lower.

Key findings

  • Miami, Los Angeles and Sacramento, Calif., have the largest share of 65-and-older homeowners with a mortgage. Across these three metros, an average of nearly a quarter — 23.64% — of homeowners 65 and older have a mortgage. That’s about five percentage points higher than the 50-metro average of 18.91%.
  • Three Texas metros — Houston, Austin and Dallas — are where the smallest share of homeowners who have a mortgage and who are at least 65 reside. An average of only 13.71% of homeowners who are 65 and older have a mortgage in these metros.
  • Typically, the homes owned by those 65 and older are worth less than those owned by the general population. Across the nation’s 50 largest metros, older homeowners’ homes are worth an average of $10,626 less than homes owned by the general population. That being said, the disparity in value varies by metro, and there are a handful of areas where homes owned by older people are worth more than those owned by the overall population.
  • Even if they’re still paying off their mortgage, older homeowners usually have lower housing costs. Across the nation’s 50 largest metros, the average total monthly housing costs for 65-and-older homeowners with a mortgage are $268 less than they are for the general population.

Metros with the largest share of 65-and-older homeowners

No. 1: Miami

  • Share of 65-and-older homeowners: 24.25%
  • Median value of homes owned and occupied by those 65 and older: $289,900
  • Median value of all owner-occupied housing units: $315,400
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $1,568
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $1,874

No. 2: Los Angeles

  • Share of 65-and-older homeowners: 23.50%
  • Median value of homes owned and occupied by those 65 and older: $669,400
  • Median value of all owner-occupied housing units: $666,900
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $2,223
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $2,659

No. 3: Sacramento, Calif.

  • Share of 65-and-older homeowners: 23.15%
  • Median value of homes owned and occupied by those 65 and older: $416,300
  • Median value of all owner-occupied housing units: $434,400
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $1,813
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $2,143

 Metros with the smallest share of 65-and-older homeowners

No. 1: Houston

  • Share of 65-and-older homeowners: 13.20%
  • Median value of homes owned and occupied by those 65 and older: $202,300
  • Median value of all owner-occupied housing units: $219,100
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $1,463
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $1,815

No. 2: Austin, Texas

  • Share of 65-and-older homeowners: 13.85%
  • Median value of homes owned and occupied by those 65 and older: $328,600
  • Median value of all owner-occupied housing units: $318,400
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $1,689
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $1,992

No. 3: Dallas

  • Share of 65-and-older homeowners: 14.07%
  • Median value of homes owned and occupied by those 65 and older: $235,100
  • Median value of all owner-occupied housing units: $253,900
  • Median monthly housing costs for homes with a mortgage owned and occupied by those 65 and older: $1,564
  • Median monthly housing costs for all owner-occupied housing units with a mortgage: $1,870

 

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Getting a mortgage later in life isn’t necessarily a bad idea

As would-be homeowners age, there are various reasons why many might second-guess getting a mortgage, especially if they’re worried they’ll be paying off their loan into their late 60s or beyond.

Some older buyers might be concerned they won’t be able to keep up with their monthly mortgage payments once they retire, while others might worry that they’ll die before they finish paying off their loan and end up saddling their family with leftover debt.

Though these concerns can be valid, that doesn’t mean that older people thinking about buying a home should necessarily shy away from getting a new mortgage — especially if they wouldn’t be able to afford a home without one.

RELATED: Metros With the Oldest — and Youngest — Homeowners

In fact, those who get a mortgage later in life might be in a better position to handle their debt than someone younger. This is because older Americans generally have better credit scores and more cash at their disposal than younger Americans.

Because people with stronger credit scores and more cash that can be used for a down payment tend to end up with better rates and smaller monthly payments than those with less cash or worse credit scores, older Americans who get a mortgage could find that paying off their loan isn’t as challenging as they feared.

Of course, income tends to drop when a person retires, but many thinking about getting a new mortgage in their 50s or 60 might find that they’re still more than capable of managing their debt even as they grow older.

Tips for getting and paying off a mortgage when you’re older

Older Americans thinking about applying for a mortgage should keep the following tips in mind to help ensure that they qualify for a loan and keep on top of their new debt.

  • Consider a retirement mortgage. As the name implies, retirement mortgages are loans that can help older homebuyers no longer in the workforce purchase a home. Because these types of mortgages don’t have the same income standards that traditional loans do, some older buyers might find qualifying for one easier than they would a traditional loan.
  • Try to avoid taking out a massive loan. Though managing a mortgage after retiring is certainly possible, it’s especially important for older homeowners not to bite off more than they can chew. The smaller their loan, the less money they’ll need to allocate each month toward paying it off and the more money they’ll have left over for other expenses.
  • Shop around before buying. Because different lenders can offer different rates, even to those with the same financial profiles, shopping around for a mortgage before buying a home is generally a good idea. Shopping around could increase an older homebuyer’s chances of finding a lender willing to work with them and help them secure a lower rate.

Methodology

Data in this study is derived on the metropolitan statistical area (MSA) level from the U.S. Census Bureau’s 2019 American Community Survey — the latest available.

Because of how the Census Bureau organizes its data, LendingTree focused on homeowners 65 and older, even though 65 is technically below the current minimum full retirement age in the U.S. of either 66 or 67 depending on the year the person was born.

 

This article originally appeared on LendingTree.com and was syndicated by MediaFeed.org.

 

More from MediaFeed:

These are the best US states for retirees

 

 

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been previewed, commissioned or otherwise endorsed by any of our network partners.

 

Saving for retirement is one of the primary underlying reasons for many personal finance decisions, from budgeting to investing. Like any money goal, however, saving for retirement — not to mention saving enough for retirement — is often easier said than done. More than 4 in 10 Americans fear they’ll never be able to retire, according to retirement savings platform SimplyWise.

 

With that being said, some states may offer a better environment for adults 65 and older to save and stay financially healthy, whether through affordable housing or something else. Overall, an average of 8.9% of these older adults across the 50 states and the District of Columbia live below the poverty line, according to a MagnifyMoney analysis of U.S. Census Bureau data.

 

Considering poverty, homeownership and mortgage status, housing cost burdens and retirement income, MagnifyMoney researchers created an index score to rank the states by older Americans’ ability to retire. Here’s what analysts learned.

 

adamkaz

 

While the coronavirus pandemic may have changed retirement plans for many adults, the share of older Americans nationally who may be struggling to make ends meet is relatively small. Across the 50 states and the District of Columbia, 8.9% of adults 65 and older live below the poverty line.

 

In 19 states and the District of Columbia, however, higher rates than the average of adults 65 and older may not be able to afford necessities.

 

DGLimages

 

MagnifyMoney researchers looked at five metrics across all 50 states and the District of Columbia to find the places where residents are best positioned for retirement. Analysts used the following metrics, which looked solely at U.S. residents 65 and older:

  • Poverty rate
  • Housing cost burdened rate (the percentage of older adults who spend 30% or more of their income on housing)
  • Homeownership rate
  • Rate of adults with retirement income
  • Rate of homeowners without a mortgage

All data comes from the U.S. Census Bureau’s 2019 1-year American Community Survey.

 

Analysts ranked every state and D.C. in each metric and created a final score for each one based on the average rank.

 

Tinpixels

 

  • Poverty rate: 8.00%
  • Housing cost burdened rate: 23.60%
  • Homeownership rate: 75.40%
  • Rate of adults with retirement income: 48.20%
  • Rate of homeowners without a mortgage: 78.70%
  • Index score: 60.34

 

 

sequential5

 

  • Poverty rate: 13.20%
  • Housing cost burdened rate: 23.60%
  • Homeownership rate: 82.30%
  • Rate of adults with retirement income: 49.30%
  • Rate of homeowners without a mortgage: 72.20%
  • Index score: 61.49

 

 

stevegeer

 

  • Poverty rate: 10.50%
  • Housing cost burdened rate: 22.00%
  • Homeownership rate: 81.00%
  • Rate of adults with retirement income: 52.10%
  • Rate of homeowners without a mortgage: 71.20%
  • Index score: 62.64

 

 

Rdlamkin

 

  • Poverty rate: 8.90%
  • Housing cost burdened rate: 26.40%
  • Homeownership rate: 79.40%
  • Rate of adults with retirement income: 60.30%
  • Rate of homeowners without a mortgage: 66.20%
  • Index score: 64.37

 

 

eyecrave

 

  • Poverty rate: 8.30%
  • Housing cost burdened rate: 29.30%
  • Homeownership rate: 77.60%
  • Rate of adults with retirement income: 63.80%
  • Rate of homeowners without a mortgage: 67.40%
  • Index score: 64.94

 

 

AppalachianViews

 

  • Poverty rate: 10.10%
  • Housing cost burdened rate: 25.50%
  • Homeownership rate: 85.30%
  • Rate of adults with retirement income: 58.50%
  • Rate of homeowners without a mortgage: 62.90%
  • Index score: 65.52

 

 

SeanPavonePhoto

 

  • Poverty rate: 9.70%
  • Housing cost burdened rate: 22.70%
  • Homeownership rate: 81.50%
  • Rate of adults with retirement income: 53.40%
  • Rate of homeowners without a mortgage: 70.30%
  • Index score: 65.52

 

 

DepositPhotos.com

 

  • Poverty rate: 8.60%
  • Housing cost burdened rate: 26.90%
  • Homeownership rate: 81.70%
  • Rate of adults with retirement income: 55.80%
  • Rate of homeowners without a mortgage: 70.00%
  • Index score: 66.09

 

 

YinYang

 

  • Poverty rate: 8.30%
  • Housing cost burdened rate: 27.10%
  • Homeownership rate: 78.80%
  • Rate of adults with retirement income: 64.80%
  • Rate of homeowners without a mortgage: 62.50%
  • Index score: 67.24

 

 

istockphoto

 

  • Poverty rate: 7.70%
  • Housing cost burdened rate: 23.30%
  • Homeownership rate: 76.50%
  • Rate of adults with retirement income: 53.60%
  • Rate of homeowners without a mortgage: 75.80%
  • Index score: 67.82

 

 

Rex_Wholster

 

  • Poverty rate: 7.40%
  • Housing cost burdened rate: 30.20%
  • Homeownership rate: 77.00%
  • Rate of adults with retirement income: 64.50%
  • Rate of homeowners without a mortgage: 65.90%
  • Index score: 69.54

 

 

FierceAbin

 

  • Poverty rate: 7.40%
  • Housing cost burdened rate: 29.30%
  • Homeownership rate: 78.40%
  • Rate of adults with retirement income: 62.70%
  • Rate of homeowners without a mortgage: 65.20%
  • Index score: 69.54

 

 

JoeChristensen

 

  • Poverty rate: 10.50%
  • Housing cost burdened rate: 22.80%
  • Homeownership rate: 83.40%
  • Rate of adults with retirement income: 56.80%
  • Rate of homeowners without a mortgage: 66.60%
  • Index score: 70.69

 

 

Sean Pavone

 

  • Poverty rate: 9.70%
  • Housing cost burdened rate: 23.40%
  • Homeownership rate: 82.30%
  • Rate of adults with retirement income: 57.10%
  • Rate of homeowners without a mortgage: 68.40%
  • Index score: 72.99

 

 

NathanMerrill

 

  • Poverty rate: 6.90%
  • Housing cost burdened rate: 25.90%
  • Homeownership rate: 81.00%
  • Rate of adults with retirement income: 58.20%
  • Rate of homeowners without a mortgage: 63.60%
  • Index score: 73.56

 

 

julof90

 

  • Poverty rate: 7.10%
  • Housing cost burdened rate: 27.00%
  • Homeownership rate: 80.70%
  • Rate of adults with retirement income: 64.50%
  • Rate of homeowners without a mortgage: 58.40%
  • Index score: 74.71

 

 

DenisTangneyJr

 

  • Poverty rate: 7.70%
  • Housing cost burdened rate: 25.50%
  • Homeownership rate: 81.70%
  • Rate of adults with retirement income: 62.80%
  • Rate of homeowners without a mortgage: 59.60%
  • Index score: 77.59

 

 

f11photo

 

  • Poverty rate: 7.20%
  • Housing cost burdened rate: 25.20%
  • Homeownership rate: 79.40%
  • Rate of adults with retirement income: 59.40%
  • Rate of homeowners without a mortgage: 69.70%
  • Index score: 79.89

 

 

Michael Pham

 

  • Poverty rate: 8.40%
  • Housing cost burdened rate: 27.00%
  • Homeownership rate: 82.00%
  • Rate of adults with retirement income: 66.80%
  • Rate of homeowners without a mortgage: 64.00%
  • Index score: 81.61

 

 

haveseen

 

  • Poverty rate: 7.30%
  • Housing cost burdened rate: 27.80%
  • Homeownership rate: 84.90%
  • Rate of adults with retirement income: 71.10%
  • Rate of homeowners without a mortgage: 57.30%
  • Index score: 82.76

 

 

mdgmorris

 

  • Poverty rate: 6.90%
  • Housing cost burdened rate: 25.60%
  • Homeownership rate: 83.90%
  • Rate of adults with retirement income: 59.90%
  • Rate of homeowners without a mortgage: 60.00%
  • Index score: 83.33

 

 

shanecotee

 

  • Poverty rate: 7.40%
  • Housing cost burdened rate: 24.30%
  • Homeownership rate: 80.40%
  • Rate of adults with retirement income: 59.80%
  • Rate of homeowners without a mortgage: 71.60%
  • Index score: 86.78

 

 

JoeChristensen

 

  • Poverty rate: 7.40%
  • Housing cost burdened rate: 21.60%
  • Homeownership rate: 84.70%
  • Rate of adults with retirement income: 56.10%
  • Rate of homeowners without a mortgage: 70.60%
  • Index score: 92.53

 

 

AnujSahaiPhotography

 

  • Poverty rate: 9.30%
  • Housing cost burdened rate: 17.40%
  • Homeownership rate: 85.20%
  • Rate of adults with retirement income: 61.10%
  • Rate of homeowners without a mortgage: 73.80%
  • Index score: 98.28

 

 

DepositPhotos.com

 

  • Poverty rate: 6.20%
  • Housing cost burdened rate: 24.50%
  • Homeownership rate: 86.40%
  • Rate of adults with retirement income: 64.50%
  • Rate of homeowners without a mortgage: 60.20%
  • Index score: 100

 

 

AndreyKrav

 

Having a little bit saved for retirement is better than having nothing. The best way to boost your retirement savings might be to find a time machine to go back and get started sooner, but it’s never too late to stash what you can and make the most of your golden years.

 

Use these tips to accelerate your savings without a ton of time:

  • Tighten up your budget to increase savings: Examine your current spending habits to see if there’s room to cut back and contribute more toward retirement savings. “Take advantage of ‘catch-up contributions’ — several tax-advantaged retirement vehicles have higher contribution limits for people over the age of 50,” says MagnifyMoney senior content director Ismat Mangla. Even a relatively small amount in a high-yield savings account can provide a little passive retirement income.
  • Use your home to your advantage: “Your home may be a source of liquidity in retirement,” Mangla says. Options like reverse mortgages or home equity loans may help older adults better manage their retirement budgets.
  • Keep your retirement plans realistic: Unfortunately, a dream retirement may not be accessible for everyone. Use MagnifyMoney’s retirement calculator to help imagine a retirement that fits your needs and financial ability. “You might have to refigure what retirement looks like for you,” Mangla says. “For example, maybe you continue working in a part-time or different capacity, or perhaps you find ways to cut expenses significantly, like through moving.”

Related:

This article originally appeared on MagnifyMoney.comand was syndicated by MediaFeed.org.

 

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Featured Image Credit: Zinkevych/istockphoto.

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