New Survey: Baby Boomers Target Florida Mortgages, Real Estate Purchases
Why is the generation of Baby Boomers such an important demographic in the Florida housing market? Because of the state’s warm climate, numerous retirees find themselves in the Sunshine State.
Therefore, a recent demographic study that reveals the 78 million Americans born between 1946 and 1964 have a passion for owning real estate unlike any in the nation’s history is releveant to agents and Florida mortgage brokers.
Consider these findings:
• Ninety-six percent of all boomers believe that owning a home is a smart financial investment; nearly four out of five currently own homes. One in four boomers owns other forms of real estate including one or more vacation homes, acreage or income-earning property.
• Home equity plays a huge role in boomers’ financial planning and well-being. Their median equity stake - the market value of their real property minus mortgage debt - is $100,000. The median household net worth of boomers - financial holdings plus real estate, minus all debt obligations– was $149,500 in early 2006.
However, 23 percent of boomers age 50 to 60 have real estate equity of $250,000 to $1 million or more. Fifteen percent of boomers aged 42 to 49 already have accumulated home equities of $250,000 to $1 million.
• Home equity represents a significant percentage of total household net worth for most boomers. Thirty-six percent of 50-year-old to 60-year-old homeowners report that the equity in their primary residences totals anywhere from 51 percent to 100 percent of their household net worth. Thirty-eight percent of boomers between 42 and 49 report the same.
The study polled a statistically representative sample of 1,969 boomers between March 31 and April 6 and has a margin of error of plus or minus 2 percent. The project was conducted by Harris Interactive and sponsored by the National Association of Realtors, always a key source in any Florida mortgage loan data.
Boomers not only believe strongly in accumulating real estate, but they also intend to keep doing so even as they head toward the traditional retirement years. An extraordinary one out of four boomers between the ages of 50 and 60 consider it very likely or somewhat likely that they will purchase some form of additional real estate within the next 12 months.
And what do they anticipate purchasing –especially now that real estate has morphed into buyer’s market mode in many areas? Two of three of those considered likely to buy will be looking at a new primary residence. But another 26 percent expect to buy land, and 19 percent plan to acquire a rental property.
Clearly some boomers expect to buy multiple pieces of property - and this is why they are such an attractive group of buyers to Florida mortgage lenders.
