{"id":6130,"date":"2017-04-26T16:19:44","date_gmt":"2017-04-26T20:19:44","guid":{"rendered":"https:\/\/www.zacksim.com\/?p=6130"},"modified":"2022-02-26T13:19:30","modified_gmt":"2022-02-26T13:19:30","slug":"trends-homeownership-rates-threat-retirement","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/trends-homeownership-rates-threat-retirement\/","title":{"rendered":"Are Trends in Homeownership Rates a Threat to Retirement?"},"content":{"rendered":"

Are recent trends in U.S. home ownership rates a threat to retirement livelihood? Many baby boomers and retirees rely on home equity for a comfortable golden period. That is Unless<\/em>, there\u2019s not enough buyers when the older generation is looking to sell their homes, which is a possibility that could be peeking through in recent demographics and home ownership trends.<\/p>\n

From 14.9% in 2014, people 65-years and older are projected to comprise 19% of the U.S. population by 2025, as suggested by prediction from the U.S. Census Bureau. And, this age group has the highest homeownership rate in the nation. At 78.8% in 2016, not too far from its 2012 peak of 81.1%, the homeownership rate among 65-and-above group<\/em> is not only substantially higher than that of millennials, but has remained the most steady of all age groups. (According to data from the U.S. Census Bureau)<\/p>\n

In contrast, the homeownership rate among people under 35-year-olds was 34.5% in 2016, down from its 2004 peak of 43%. For the 35-44 age group, the rate is 58.6%, down from the 2005 peak of 69.3%.<\/p>\n

<\/p>\n

There could be a number of reasons behind the lower homeownership rates among younger people \u2013 inclination towards living in urban neighborhoods, college students with debt obligations, an increasingly mobile youth changing residential locations for work, etc.<\/p>\n

As for the overall U.S. population, the annual home ownership rates rate is 63.4% \u2013 down from a peak of 69% in 2004.<\/p>\n

With the tightening cycle underway, upward pressures on mortgage borrowing costs could follow. That raises chances of an extended subdued home demand, especially among the millennials \u2013 a condition that could leave baby boomers with less demand for their homes and therefore, a potential reduction in their market values.<\/p>\n

Bottom Line for Investors<\/strong><\/p>\n

If the decline in the younger generation\u2019s homeownership rates gets prolonged, some retirees could be succumbed into selling pressures, especially amid an increasing proportion of older people in the population.<\/p>\n

We\u2019re not putting a number yet on the probability of the afore-mentioned situation, but it doesn\u2019t hurt to prepare well in advance against potential downside risks, including those of home equity values. That\u2019s why, at Zacks Investment Management, we help our clients plan a long-term investment strategy suited to their individual financial\/retirement goals and build a well-diversified nest egg \u2013 which goes beyond just home equity.\u00a0 To give you insights into planning for retirement, we are offering a comprehensive Guide to Retirement. This guide includes a step-by-step process for effective savings and investment planning. Get your copy for free, by clicking on the link below:<\/p>\n","protected":false},"excerpt":{"rendered":"

Are recent trends in U.S. home ownership rates a threat to retirement livelihood? Many baby boomers and retirees rely on […]<\/p>\n","protected":false},"author":1,"featured_media":4124,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,72],"tags":[],"class_list":["post-6130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investor-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6130","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=6130"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6130\/revisions"}],"predecessor-version":[{"id":11036,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/6130\/revisions\/11036"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=6130"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=6130"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=6130"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}