Wednesday, July 18, 2012

From Owning to Renting among Older Americans

Homeownership is highest among older Americans, with a peak rate of 81 percent for householders aged 65. The rate falls with age to 54 percent among householders aged 95. Is the decline in homeownership a choice older people make or a response to reduced circumstances? This question is examined in a new report by the Employee Benefit Research Institute, which analyzes data from the University of Michigan's Health and Retirement Study--a biennial survey that tracks the socioeconomic status of people aged 50 or older.

The EBRI analysis finds three factors to be most important in determining who transitions from owning to renting: a loss of income, the death of a spouse, and nursing home entry. Among householders aged 50 or older who had transitioned from owning to renting, 41.9 percent had experienced the death of a spouse--making widowhood the number one reason for housing change. Second was a decline in income (30.5 percent). Third, some homeowners who became renters did so after the householder or spouse entered a nursing home (10.9 percent).

Source: Employee Benefit Research Institute, Own-to-Rent Transitions and Changes in Housing Equity for Older Americans

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