Within the next five years, Baby Boomers are projected to have the largest household growth of any other generation during that same time period, according to the Joint Center for Housing Studies of Harvard. Let’s take a look at why…
In Merrill Lynch’s latest study , “Home in Retirement: More Freedom, New Choices” they surveyed nearly 6,000 adults ages 21 and older about housing.
Crossing the “Freedom Threshold”
Throughout our lives, there are often responsibilities that dictate where we live. Whether being in the best school district for our children, being close to our jobs, or some other factor is preventing a move, the study found that there is a substantial shift that takes place at age 61.
The study refers to this change as “Crossing the Freedom Threshold”. When where you live is no longer determined by responsibilities, but rather a freedom to live wherever you like. (see the chart below)
As one participant in the study stated:
“In retirement, you have the chance to live anywhere you want. Or you can just stay where you are. There hasn’t been another time in life when we’ve had that kind of freedom.”
On the Move
According to the study, “an estimated 4.2 million retirees moved into a new home last year alone.” Two-thirds of retirees say that they are likely to move at least once during retirement.
The top reason to relocate cited was “wanting to be closer to family” at 29%, a close second was “wanting to reduce home expenses”. See the chart below for the top 6 reasons broken down.
Not Every Baby Boomer Downsizes
There is a common misconception that as retirees find themselves with less children at home that they will instantly desire a smaller home to maintain. While that may be the case for half of those surveyed, the study found that three in ten decide to actually upsize to a larger home.
Some choose to buy a home in a desirable destination with extra space for large family vacations, reunions, extended visits, or to allow other family members to move in with them.
"Retirees often find their homes become places for family to come together and reconnect, particularly during holidays or summer vacations."
If your housing needs have changed or are about to change, meet with a local real estate professional in your area who can help with deciding your next step.
Here are four great reasons to consider buying a home today, instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.0% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
3. Either Way, You Are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing cost to work for you?
4. It's Time to Move on With Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.
If purchasing a home for you and your family is the right thing for you to do this year, buying sooner rather than later could lead to substantial savings.
We previously informed you about a study conducted by TransUnion titled, “The Bubble, the Burst and Now – What Happened to the Consumer?” The study revealed that 1.5 million homeowners who were negatively impacted by the housing crisis could re-enter the housing market between 2016-2019.
Recently , HousingWire analyzed data from the US Bankruptcy Courts and revealed that 6 million Americans will have their bankruptcies disappear off their credit reports over the next five years and that this could “ possibly send a flood of more homebuyers into the housing market. ”
The chart below shows the total number of bankruptcies filed by year in the US over the last 10 years. The light blue bars represent over 3.3 million people who have already waited the 7 years necessary for their reports to no longer include their bankruptcies.
ICEHOUSE AMPHITHEATER: The 246th Army Band will play a free concert at 7 p.m. Monday, July 3, before a fireworks display. 107 W. Main St., Lexington.
SALUDA SHOALS PARK: The Lake Murray Symphony Orchestra’s Star-Spangled Symphonic Salute is 8 p.m. Monday, July 3. 5605 Bush River Road. $5 per car.LEXINGTON COUNTY PEACH FESTIVAL: There’s something oh so American about a day that includes a peach recipe contest, a car show, a peach parade, live music and, obviously, fireworks. The festival starts at 9 a.m. Tuesday, July 4, at the Gilbert Community Park with fireworks at 10 p.m. 110 Rikard Circle, Gilbert.
"Star Spangled Symphonic Salute" Concert | Lake Murray Symphony Orchestra
Saluda Shoals Park!
Patriotic concert at Saluda Shoals Park! Broadway songs, patriotic music and sing-a-longs. Bring picnic blanket or chair. Children's activities. 7pm. More here.
246 Army Band | Icehouse Amphitheater
Monday, July 3, 2017
Uncle Sam Jam | Mount Pleasant Pier
Tuesday, July 4, 2017
To start the year, housing experts all agreed on one thing: 2017 was going to be the year we would see mortgage interest rates begin to rise. After years of historically low rates, and an improving economy, the question wasn’t if they would increase but instead how much they would increase . Some thought we could see rates hit 5-5.5% by the end of the year.
However, the exact opposite has happened. Instead of higher rates as we head into the middle of 2017, we now have the lowest rates of the year (as reported by Freddie Mac ). Here is a graph of mortgage rate movement since the beginning of the year: