You may have heard of reverse mortgages as a way for seniors to tap the equity in their homes to pay for living expenses, but there are other ways that older homeowners are using their homes to get by.
The U.S. may be the "land of opportunity," but Canadians are making out better. In the past five years, the net worth of Canadian households has surpassed that of their American counterparts for the first time. And the reasons why will be as depressing for Americans as the news itself.
Becoming a homeowner is a rite of passage in America, while renting gets no respect. But when you look at how we really live, it turns out that, even ignoring the recent crash, home ownership isn't the great deal for our finances that we've been led to believe.
Ben Bernanke says declines in home prices have forced many Americans to cut back sharply on spending warns that the trend could continue to weigh on the economy for years. The Federal Reserve chairman drew the connection between home values and consumer spending, which fuels 70 percent of economic activity, on Friday during a speech to the National Association of Home Builders in Orlando.
The two biggest banks in the reverse mortgage business are getting out of it. Now, Bank of America and Wells Fargo accounted for less than half of the reverse mortgages in America, and other lenders are still writing them. But seniors in financial trouble should explore theses alternative ways to stay in their homes.
Sales agreements for previously occupied homes rose 10.4 % in October. But that one spark of hope comes against a backdrop of declining prices, bulging inventories and ongoing legal issues around foreclosures. Don't count on a real estate recovery next year.
In the period beginning with the close of World War II and right up to 2005, buying a house opened up a pathway to upward mobility even for those without college degrees. But the great American housing bust has dramatically changed that dynamic. Can it ever come back?
Despite falling real estate prices, houses still cost almost twice as much as they did in 1975 when you adjust for inflation. Relative to average income, they're 40% higher. By many measures, houses are still unaffordable, which helps explain the current 15% vacancy rate.
