Half of Americans Struggling to Afford Their Mortgages

June 4th, 2014  |  by Jason Oliva Published in News, Senior Housing

Americans have been struggling with housing affordability over the last three years, with 52% having to make sacrifices to cover their rent or mortgage, according to a recent survey.

Getting an additional job, deferring saving for retirement and cutting back on health care were just some of the sacrifices these struggling homeowners have made to afford housing, reports the “How Housing Matters Survey” conducted by Hart Research Associates.

The survey, commissioned by the nonprofit John D. and Catherine T. MacArthur Foundation, represents a shift among Americans’ attitudes toward the overall housing market and how they view homeownership as a valuable investment. 

About 43% indicate it is no longer the case that owning a home is an “excellent long-term investment and one of the best ways for people to build wealth and assets.”

Additionally, more than half (54%) believe that buying a home has become “less appealing” than it once was, given the current market environment, while a similar proportion of adults (51%) believe that renting has become “more appealing.”

“The housing crisis that began more than five years ago has left an indelible mark on the attitudes and experiences of Americans,” stated Geoffrey Garin, president of Hart Research Associates. “Housing affordability has driven a large share of the American people to make significant financial adjustments.”

Driving these attitudinal changes is a growing perception that the aftermath of the housing crisis has yet to signal relief for a high proportion (70%) of Americans.

Of this group, 51% continue to believe the country is still in the midst of the crisis, while 19% believe that the “worst is yet to come.” 

The public in 2014 is only slightly more optimistic than it was a year ago, the survey notes, when 77% believed the nation was still in the grips of the crisis. 

“The continuing stresses felt by the vast majority of Americans in the aftermath of the housing recession are real and profound,” stated Jula Stasch, MacArthur’s vice president of U.S. programs. “It is clear that Americans believe more can and should be done to improve housing affordability for renters and owners, and that government should take action to invest in both equally.”

Written by Jason Oliva

“RightSize” New Home with a Reverse Mortgage?

“RightSize” New Home with a Reverse Mortgage?

According to recent National Association of Realtors figures, last year over 26% of homes were sold to homebuyers over the age of 50. And as the peak bulge of the boomer generation approaches retirement, the number of older homebuyers is expected to rise dramatically until it makes up the largest homebuyer cohort in American history.
But not everyone heading into retirement is certain they want to move, and a question I am commonly asked is, “Should we refinance the home we’re in, or buy something with less upkeep?”
Obviously I don’t know – but I have accumulated quite a body of knowledge regarding what retiring boomers take into consideration. Following is a starting point for things to consider:
1.     Is your existing home safe for the long-term, including layout and accessibility to bedrooms, bathrooms, kitchen and laundry?
2.     Is the home the right configuration? How about size?
3.     Is the amount of yard and household maintenance appropriate?
4.     Is the location still right, meaning are you close to family and friends?
5.     Have traffic patterns gotten dangerous?
6.     Are you close to doctors, shopping, amenities, recreation, and your house of worship?
7.     Do you still know your neighbors?
8.     Will this still be the right house in 10 years? How about in 15?
If you answer a significant number of these “no,” moving might be a logical consideration. However, anyone who recently has applied for a home loan knows lending laws and regulations have become akin to major surgery. And for those looking to retire soon, or who have already retired, securing a loan can be very difficult.
However, FHA’s seniors’-only HECM for Purchase was specifically designed with the retired – or soon to be retired – buyer in mind. While there are qualifications that must be met, they are not as stringent as those governing “forward” lending.
A highly beneficial feature of HECM for Purchase is that you can buy your new home before you have sold your exit home. Not only does this get you into your new home in a timely fashion, but you now have time to market your exit home and wait for the next peak sales season to roll around before selling.
But perhaps best of all, rather than tying up a significant amount of your financial resources in the new house by doing an all-cash purchase, you bring to the table only a percentage of the purchase price, which allows you to keep liquid more of your savings, or more cash from the sale of your exit home.