Recession causes older adults to rely on savings for down payment

The recession has changed the habits of adults over 55 who are looking to pack their moving boxes and purchase a new home.

While most buyers aged 55 or older previously depended on the proceeds of a previous home sale to finance a down payment on a new home, new data has found that the economic downturn has changed that buying dynamic. In 2009, only 55 percent of adult home buyers said their down payment came from a previous home sale, a massive drop from 92 respondents in 2007 and 100 percent in 2005.

Furthermore, respondents in 2005 and 2007 did not need to use their savings to fund a down payment, compared to 45 percent in 2009 who reported that using cash or savings was necessary.

Proximity to friends in family is also important for 55+ buyers interested in relocation, according to the report, which said that since the recession began, that factor has become more important than the house design, amenities and surrounding community.

The over-50 population places a higher value on home ownership than younger generations, reported Fannie Mae, which said adults ages 65 to 75 are three-and-a-half times more likely to own their own home than adults under 25.

More News