PHILADELPHIA - Most Baby Boomers, who are reaching the age where they qualify for a reverse mortgage, desire to "age in place," that is stay in their current home.
The report is a project of the National Association of Home Builders and the MetLife Mature Market Institute and released during the NAHB Building for Boomers & Beyond: 50+ Housing Symposium here.
The report found that over 70% of households 55 years old and over own a single-family detached house. A small but growing number of seniors (3% according to the survey) are seeking what the report terms "active adult" age restricted communities, up from 2% in 2003.However the number of units of this type of housing being built has declined as a result of the downturn in the economy. Sales of new homes in the active adult category have fallen off as interested buyers are unable to sell their current properties or are not putting them on the market until things stabilize.
From the builder perspective, the report noted that one of the reasons why they like the age-qualified active adult segment is that most buyers do not need to obtain financing of any sort to buy a property.
"Roughly half of the buyers for new, age-qualified active adult homes in 2007 needed to take out a mortgage. For those who did, the median loan to value ratio was 65%. More than 90% of the new age-qualified active adult home buyers who made a down payment reported that it came from the sale of previous homes," the report said.
However, that number has steadily increased since 2001 when only about 30% of these buyers needed to a mortgage to purchase a property.
In an anomaly, for 2001, 2003 and 2005, virtually no buyers used an adjustable rate mortgage. For 2007, 20% said they got an ARM.
For new homes purchased by those over 55 but not in an age-qualified community, 70% said they needed a mortgage and the median LTV was 59%; in 2001, 55% needed a mortgage, but they needed to borrow more, as the median LTV was 69%.
