Thirty-Somethings Fear Home Values Won’t Help Retirement

Nearly half of all homeowners in their thirties have lost hope that their homes will recover enough value in time to play an important role in paying for their retirement.

With 22.5 percent of all homeowners with a mortgage underwater, only 68 percent of homeowners of all ages are still relying on their home’s value is important to their retirement plan, according to a new survey by Country Financial.

Only homeowners over 50, many of whom bought their homes before the housing boom, and those under 30 remain most confident that their homes’ values will play a very important or important role in their retirement.  Among those older than 50 who are approaching retirement, 71.7 percent see their homes’ value helping to pay for retirement.  Some 83 percent of young homeowners between 18 and 29 have hopes that the housing market will recover in time to help them in retirement, more than any other age group.

The survey also found that two out of three homeowners (68 percent) claim if they lost their job, they wouldn’t be able to make mortgage payments after nine months. That period is shorter than the current average unemployment length of nearly 10 months, according to the Bureau of Labor Statistics.

Last week CoreLogic reported that 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2011, down very slightly from 22.7 percent in the first quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the second quarter. Together, negative equity and near-negative equity mortgages accounted for 27.5 percent of all residential properties with a mortgage nationwide. The new report also shows that nearly three-quarters of homeowners in negative equity situations are also paying higher, above-market interest on their mortgages. (See  Millions of Drowning Homeowners Pay Excessive Rates)

“The housing market decline and high unemployment has put a strain on everyone. Although there’s no quick fix, having a financial safety net can help. If possible, start an emergency fund to offset those unexpected life changes like unemployment,” says Keith Brannan, vice president of financial security planning. “If you’re concerned about your mortgage, seeking professional advice to reprioritize your income can help you protect your current possessions and budget for future expenses.”

The COUNTRY survey on home ownership is based on a national telephone survey of 2,264 homeowners and is compiled by Rasmussen Reports, LLC (, an independent research firm. The question as to whether owning a home was the best investment a family could make was asked of 3,000 adults. The margin of sampling error for that question is also approximately +/- 2 percentage points with a 95 percent level of confidence.

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