In a recently released study, Met Life predicts that the demand for reverse mortgages will grow:
As for financing boomer housing in retirement, the use of reverse mortgages will become more prevalent, especially since boomers have invested heavily in their homes. Since, with reverse mortgages, both husband and wife (or domestic partners) can remain in their homes as long as they live, the risk associated with tapping home equity is reduced. Funds from reverse mortgages can provide a regular stream of income, cover repairs or retrofitting, or pay for long-term care services. At the present time, out of the nearly 28 million households age 62 and older, some 13.2 million are good candidates for reverse mortgages. And as the 77 million boomers reach age 62 and beyond – the age of eligibility for reverse mortgages – this number will grow.
Another important factor will be the direction of future public policy. Its no secret that the “home equity” nest egg is viewed by many as a key element of the solving the emerging Medicaid/long-term-care problem. The extent to which policy is implemented that points seniors in this direction remains to be seen.