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American Homeowners Need a New Retirement Plan, Unison Survey Shows

January 30, 2020 GMT
Unison logo (PRNewsfoto/Unison Homeownership Investors)
Unison logo (PRNewsfoto/Unison Homeownership Investors)

SAN FRANCISCO, Jan. 30, 2020 /PRNewswire/ -- When it comes to retirement, misplaced confidence is high among American homeowners, Unison’s “State of the American Homeowner” survey found.

“For many American homeowners, the home is their largest financial asset and should therefore be at the core of their financial planning, including planning for retirement. But most homeowners don’t understand how to appropriately include this major asset, and the risk that comes with it, in planning for the future,” CEO Thomas Sponholtz commented. “The extent to which homeowners, especially baby boomers, are financially underprepared for retirement is a concern. And the problem cannot be solved without including the home in financial plans.”

Undersaved but overconfident
Almost half (48%) of American homeowners say they plan to retire in their 60s. Another 9% plan to do so during their 50s, and 22% plan on their 70s; 5% say they’ll never retire, and 11% don’t know. More than two-thirds (68%) of American homeowners are “confident” or “very confident” in the amount of money/assets they have saved to fund their retirement, but the numbers they report don’t support their optimism.

Overinvested in their homes
The vast majority of American homeowners (90%) think of their home more as a financial asset than a financial burden, and homes figure prominently in their financial portfolios, but almost a quarter (23%) of those who say it’s an asset don’t yet know how they will use it.

Banking on home for retirement
Homes also figure prominently in Americans’ retirement planning. A quarter of American homeowners (25%) are planning to use their home as an asset to fund their retirement. Forty-two percent of those say their home is one of the top four most important ingredients in their retirement plan, and one in 10 of those say it’s the biggest part of their retirement plan.

Planning on home price appreciation
Homeowners are generally optimistic about home prices. Almost three-fourths of homeowners (70%) think their house will be worth more by the time they retire: 35% think it will be worth 10% more, another 25% think it will be worth 25% more, and an optimistic 8% think it will be worth 50% more. Just 12% of people think their house will be worth the same when they retire as it’s worth today, and only 4% think the value might decrease.

Emotional security
Most homeowners think about their home’s value first in non-monetary terms. A quarter of homeowners (25%) say they value their home’s potential as a financial asset/nest egg as one of the top 3 most important things, but this is lower than the emotional value homeowners see from its role as a place for family to come home and gather (34%) and memories made in the home (31%).

Counting on vanishing solutions
American homeowners are counting on retirement solutions that may not be available by the time they get there.

Sponholtz noted, “In the United States, if there’s $30 trillion dollars of residential real estate, about $15 trillion is mortgaged and about $15 trillion is equity owned by 132 million individual homeowners. Imagine if you make that $15 trillion of equity that’s locked up in homes liquid, so that equity becomes part of the homeowner’s active net worth. That could unlock the biggest component of the U.S. economy, and at Unison, it’s what we’re striving toward.”

About Unison’s “State of the American Homeowner” Survey
From August 16 to 23, 2019 Unison conducted an online survey with data collection and sample provided by Dynata. The survey questioned 2,000 US adults from a national sample who are current homeowners. Respondents were required to have a household income of at least $50k or above, to have been a homeowner for at least 10 years, and to have not yet retired.

About Unison

Unison is a San Francisco-based company that is pioneering a smarter, better way to buy and own your home. We are a team of professionals with an extensive background in finance and real estate who are committed to helping homebuyers get the home they want, and homeowners finance their life needs without adding debt. We believe in a world where buying and owning a home is not a zero-sum game, and that with the right partners, everyone can win. For additional information, visit www.unison.com or follow us on Facebook, Instagram, LinkedIn,Twitter and YouTube.

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