We came across a recent forecast from Harvard University’s Joint Center for Housing Studies that projects the long-term outlook for the home remodeling industry. Here’s a summary of the key findings that are relevant to the reverse mortgage arena:

the number of households will increase by about 15 million by 2015, of which approximately 12.1 million will be owner households. This means that the number of homeowners will rise from 74.2 million to 86.3 million between 2005 and 2015.

Between 2005 and 2015, homeowner improvement activity is projected to grow by 43.6 percent, from $188 billion to over $270 billion (a 3.7% inflation-adjusted average annual growth rate).

Between 2005 and 2015, the largest projected growth in households will come from minority households and non-family households.

Most interesting, perhaps, is the finding that aging Baby Boomers are not expected to taper home remodeling spending levels as sharply as prior generations of senior homeowners did largely due to the desire to “age-in-place” and the increased availability of financing tools like reverse mortgages:

As the population continues to age, higher shares of Seniors will also change the mix of remodeling demand. In fact, between 2005 and 2015, the number of owner households over the age of 65 will grow by 32 percent. While older generations have slowed their spending levels, they also remain unique in their tastes and ideas about growing old. Studies have shown that the vast majority of persons over 60 years old stated that they wanted to stay in their current homes as they age, rather than move. A recent study by the American Association of Retired Persons (AARP) confirmed that over 90 percent of their respondents would prefer to live in their current home as long as they were able. This fact, coupled with higher levels of wealth and a proliferation of financial tools for retirement, such as reverse mortgage products, will bode well for the industry. Aging in place will likely become an increasingly important segment of the market, leaning heavily on professionally installed work, and with a very different mix of projects than other generations might demand. As such, we predict that spending for households over the age of 60 will grow by 185 percent by 2015 (emphasis added).

It’s encouraging to see a report from an esteemed academic institution project positive synergy between reverse mortgages and home remodeling. Of course, scam artists have been able to use the combination of reverse mortgages and home remodeling to defraud senior homeowners too many times in the past. We hope that the projected up tick in reverse mortgage-financed home improvements is accompanied by strong consumer protections for senior homeowners.

Social tagging: Reverse Mortgage Scams

A Few More Related Articles of Interest:

Inverse Mortgage vs Reverse Mortgage

Met Life Predicts Surge in Reverse Mortgages

NY Times: Beware of Reverse Mortgages

How Can Reverse Mortgages Discriminate by Age?

How People View Reverse Mortgages