A question on the minds of many older Americans that are trying to find balance between their housing needs and financial situations as they prepare to retire is the decision to rent or own a home.
More baby boomers are selling their homes this year in order to obtain equity that has been returned since the housing crisis, according to a report from the Wall Street Journal by Jane Hodges, home-sales data, and anecdotal evidence.
"Although investors have been told for years not to think of their primary homes as investments, having a healthy chunk of home equity can make a big difference when it comes to planning retirement finances," Hodges wrote.
Hodges explained that renting presents both positives and negative aspects for retirees. Although renters are afforded a certain amount of options, flexibility, and little to no maintenance costs, increasing rents cut into fixed income with no offsetting equity.
The National Association of Home Builders (NAHB) and American Community Survey data found that over 48 million households in the U.S. are headed by someone who is 55 or older, accounting for about 42 percent of all households.
Senior households have been rising slowly over the decades, but this is about to change in the coming years. Urban Institute’s analysis of housing trends determined that senior households are expected to grow dramatically by 2030.
The Institute found in 1990, there were 20 million households for seniors ages 65 and up. In 2010, this number had reached 25.8 million, and by 2030, the institute projects that aging baby boomer households will reach 46 million.
“This dramatic growth will occur among both senior homeowners and renters, Urban Institute said. “Our research suggests that from 2010 to 2030, senior homeowners will increase from 20 million to almost 34 million, and senior renters—who include both homeowners who will shift to renting and baby boomers who already rent—will increase from 5.8 million to 12.2 million.