Survey results underscore the need for education on the benefits of home equity-based solutions and reverse mortgages.

Finance of America’s second annual Home Equity Punch List survey reveals persistently high anxiety among U.S. homeowners as it relates to their economic outlook and personal finances. Nearly 8 out of 10 (79%) homeowners surveyed feel anxious about the state of the U.S. economy, the same as 2022, while anxiety about financial expenses increased further. A key finding points to varying levels of product knowledge and low familiarity with the different ways financial products can be used as potential factors contributing to financial anxieties for some homeowners. Notably, respondents familiar with a reverse mortgage were also more likely to know the different use cases of financial products – with 73% reporting they were aware home equity could help supplement income in retirement, compared to just 40% for those unfamiliar with a reverse. Drilling down further into the overall confusion or unawareness of the specific uses for certain financial products, interestingly, women respondents reported being less familiar with products than men, with retirement accounts like a 401(k) or IRA as the exception where women and men were equally familiar. Baby Boomers reported being less familiar with home sharing, cash-out refinancing, reverse mortgages, and cryptocurrency when compared to Gen X and Gen Z/Millennials. Women and older generations were also less familiar with different financial products and less aware of how the benefits of home equity – and reverse mortgages specifically – can help address many of their financial concerns, including the ability to pay for certain expenses, such as healthcare costs and home renovations. Commenting on the survey results, FOA Chief Marketing Officer, Chris Moschner said, “Homeowners’ concerns about the economy remain high and they are more apprehensive about their ability to meet their future financial goals compared to last year. This coincides with the fact that more than three in four seniors can’t meet their financial obligations in retirement and America’s retirement savings gap is nearing $4 trillion. There is a persistent lack of education and limited understanding of the benefits of home equity-based solutions and reverse mortgages – such as supplementing retirement accounts, helping older homeowners age in place, and paying for long-term care needs – exacerbating the problem further. However, we have an obvious solution hiding in plain sight, that can help allay concerns about financial longevity. Now is the time to tackle this challenge head on.”


Source: BusinessWire