TheMReport

September 2016 - Women in Housing

TheMReport — News and strategies for the evolving mortgage marketplace.

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54 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G A NA LY T I C S S E C O N DA R Y M A R K E T FEATURE www.4prescient.net 888.653.8357 Identify Associations Retrieve Pertinent Documents Determine Account Statuses Compliance & Complete Payment Services H O A A C C O U N T M A N A G E M E N T H O A A C C O U N T M A N A G E M E N T The 55+ Population Isn't What it Used to Be Shift in behavior or seniors spells opportunity for lenders and servicers T he 55-and-over population is not behaving the way it used to. Whereas the 55+ population in previous generations was retiring (or close to retirement) and moving to se - nior living communities, the 55+ population of today (the baby boomer generation) are living longer, retiring at later age, and are on the move. Dave Lowman, EVP of Single-Family Business at Freddie Mac, called the 55+ age group "your next business opportuni - ty." What has grown to be the second-larg- est generation in history (approximately 67 million, currently) accounts for one-fourth of the population, but holds about two-thirds of the country's housing wealth. Lowman said the decisions this age group makes "will have a significant impact on the demand for hous - ing and mortgage credit." "Their numbers and their housing wealth guarantee that the housing decisions of older homeowners will play an outsized role in shaping the housing opportuni - ties available to the generations that follow them—Gen X and the massive millen- nial generation," said Sean Becketti, Chief Economist with Freddie Mac. "And the influence of the 55+ population will last a long time. Today's 65-year-old can expect to live until age 84 on average. In contrast, the life expectancy of the Greatest Generation— those born between 1900 and 1924—was 47 years. With a longer life span and ample wealth, many older homeowners may buy and sell several more homes before they're done." Population data combined with results from a survey by GfK commissioned by Freddie Mac about the plans of 55+ homeowners revealed three things about that population: a large percentage of them plan to move, millions will be looking for financing options, and 55+ consumers are a financially confident generation. Nearly 25 million of 55+ homeowners expect to move one more time, 9 million of them plan to move in the next four years, and 6.5 million of them plan to buy a house, according to Freddie Mac. The survey also showed that 20 million 55+ homeowners plan to either buy a house or finance age- in-renovations, which creates a significant market opportunity, Lowman said. Many 55+ homeowners are still pay - ing for their homes and will be for some time—the survey found that out of 55+ homeowners who are retired, 36 percent of them have a mortgage. Out of those still working, 57 percent have a mortgage. According to Freddie Mac, a majority of those homeowners have 10 years or more left to pay. In addition, this generation has $8 trillion in housing equity and 51 million of them out of the 67 million (slightly more than three-quarters) say they are confident they will be financially comfortable in retirement. "The bottom line: This is a sizable market," Lowman said. "Even a relatively modest increase in lending to 55+ home - owners could add trillions of dollars in new originations in a relatively short time." "Even a relatively modest increase in lending to 55+ homeowners could add trillions of dollars in new originations in a relatively short time." —Dave Lowman, Freddie Mac

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