While America struggles to meet the housing needs of its aging population, reverse mortgages remain a valuable source of funding for older Americans who have financial and other retirement needs, according to a new report published this week by the Harvard Joint Center for Housing Studies and AARP Foundation.
Titled Housing America’s Older Adults—Meeting the Needs of An Aging Population, the report estimated the number of adults in the U.S. aged 50 and over will grow to 132 million by 2030, an increase of more than 70 percent since 2000. It also noted that housing that is affordable, physically accessible, well-located, and coordinated with supports and services is already in short supply.
The report concluded that high housing costs currently force a third of adults 50 and over—including 37 percent of those 80 and over—to pay more than 30 percent of their income for homes that may or may not fit their needs, forcing them to cut back on food, health care, and, for those 50-64, retirement savings.
States have implemented property tax relief as one possible solution to address housing cost challenges, while at the federal level, the report singled out HUD’s Home Equity Conversion Mortgage program.
“Reverse mortgages can be particularly helpful to lower-income households holding most of their wealth in home equity,” said the report. “For example, reverse mortgages can be used to convert a portion of housing wealth into an income stream to help cover property taxes and insurance payments, the costs of supportive care, and other living expenses. The ability to choose either a lump sum or a line of credit can assist homeowners in paying for one-time, big-ticket expenses, such as home modifications or improvements.”