Oregon is in the midst of a housing crisis. As of 2019, we are short almost 6 million homes (NAR, 2019). The shortfall has been attributed to many different factors creating a “perfect storm” for low home inventory; Some of those factors include:
1. Crippling student debt preventing them from moving because they can’t qualify for a new loan(NAR, 2019)
2. Shortage of affordable housing: median home prices in Oregon in 2019 were $346,300 (Zillow), and as of 2017, the median household income for Oregon was $60,212 (https://www.deptofnumbers.com/income/oregon/). Many Oregon families are unable to afford the homes that are currently available. “The widening gap between the growth of wages and the cost of housing has put homeownership out of reach for more and more families, particularly families of color.”(Washington Post, Bernstien 2020)
3. Inability to find skilled labor to build homes. There is a nationwide shortage of skilled labor: From Forbes.com “over 80% of construction firms have reported they are having a hard time finding qualified workers to hire, while the U.S. Department of Education reports that there will be 68% more job openings in infrastructure-related fields in the next five years than there are people training to fill them.”
4. Multiple layers of confusing red tape and government regulations preventing builders and developers from moving forward with projects. (Washington Post, Bernstien 2020)
5. An increasingly difficult time acquiring building materials due to trade tariffs, lack of American made natural resources such as wood and steel and rising costs of transportation due to fuel cost and shortage of truck drivers. (Washington Post, Bernstien 2020)
With so many different factors leading to Oregon’s home shortage, we need to consider some different options to loosen the squeeze on the available home inventory. More than 67 million homeowners that are 55+ control almost two-thirds of the nation’s home equity – about $8 trillion. (Freddymac.com, Becketti, 2016). There are more senior homeowners in America now than ever before and the number is growing.
“Over the next two decades, the growing population in the oldest age groups will lift the share of all U.S. households age 65 and over from 26 percent in 2018 to 34 percent in 2038,” the study reads. (Reverse Mortgage Daily, Clow, 2019)
Seniors are aging in what some are calling the “Silver Tsunami”- an abundance of elderly homeowners will be moving in the next several years- bringing single family homes onto the market in waves. In 2019, 39% of home purchases were made by seniors 55+ (NAR, 2019) and this is just the beginning. Many of these seniors are seeking to downsize into homes that are more suitable to their lifestyle and more affordable in retirement so they can age in place in comfort.
We need to make it easier for seniors to secure affordable housing in retirement so they can live comfortably with some financial freedom. In doing so, it will free up a wealth of single family homes- invigorating the market with a steady flow of home inventory. Reverse Mortgages can be key in doing that.
With a reverse mortgage, seniors 62 and older can buy a new home with no monthly mortgage payments. Reverse mortgages are an FHA insured loan option, often referred to as the HECM program. They are becoming increasingly more popular and Jeff Foody MLO 253303 with Northwest Reverse Mortgage is one of Oregon’s leading experts on reverse mortgages with over 17 years in the industry. Purchasing a home with a reverse mortgage is becoming a more popular option as it becomes more mainstream. Jeff Foody makes it a priority to teach about this loan option through seminars and classes- We invite seniors, people that serve seniors and family members who are concerned about their loved ones to attend our seminars. Jeff is also certified to provide CE courses through the state of Oregon to realtors- to teach them all about the reverse mortgage for purchase process “Several realtors that attend our class have told us that this loan option has changed their the way they present downsizing to seniors. It has opened up a whole new world of possibilities for their senior clients. Before, they were unable to secure a home to purchase for many of their senior clients due to the seniors not being able to meet credit or income qualifications for a traditional loan or not wanting to take on a new monthly mortgage payment in retirement. This loan option has very minimal credit and income qualifications as it is made specifically for seniors and there are no monthly mortgage payments. It’s a game changer.” Explains Jeff.
“If we could get these seniors into homes that are better suited to their lifestyle and budgets, imagine what that could do for all the families out there searching for a home. Many seniors feel trapped in the homes they are struggling in as if they have no options. A lot of people 62 and older still don’t know this loan exists or is available to them so it is imperative that seniors and people who serve seniors become educated about this product.” Explains Foody.
An influx of properties onto the market would invigorate neighborhoods, strengthen the economy and give hope to so many people yearning to achieve the American dream of homeownership and others wishing they had a more comfortable situation in retirement. Reach out to us today to learn more about the reverse mortgage for purchase. We hope to help many seniors realize their dream of a happy, comfortable retirement in a new home that fits them perfectly.