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Income and Assets of Medicare Beneficiaries, 2013 – 2030 – Issue Brief – Home Equity of Medicare Beneficiaries « » The Henry J. Kaiser Family Foundation

Income and Assets of Medicare Beneficiaries, 2013 – 2030

Home Equity of Medicare Beneficiaries

As with income and savings, in this analysis, home equity values are divided equally between spouses to calculate per capita home equity.  Projected growth in home equity values is adjusted for inflation and all dollar amounts are in 2013 per capita dollars.  The home equity values shown account for any decrease in home equity values that occurred as a result of the mortgage crisis; it has been estimated that more than 1.5 million Americans over age 50 lost their homes between 2007 and 2011.1

In 2013

Most beneficiaries (79%) had some home equity, with substantial variation in home equity across beneficiaries in 2013.  Half of all beneficiaries had less than $66,700, and one-quarter had less than $12,250 in home equity, including 21 percent who had no home equity at all in 2013 (Exhibit 7).  At the other end of the distribution, five percent had more than $398,500 in home equity, including one percent who had more than $799,850 in home equity in 2013.

Exhibit 7.  Half of all Medicare beneficiaries had home equity below $66,700 per person in 2013

Exhibit 7. Half of all Medicare beneficiaries had home equity below $66,700 per person in 2013

The share of beneficiaries with home equity, and the distribution of home equity, differed across demographic characteristics in 2013 (Exhibit 8).  Rates of home equity were lower among single beneficiaries (36%) and divorced beneficiaries (61%) than among married or widowed beneficiaries.  Home equity rates were also lower among Hispanic and black beneficiaries (60% and 65%, respectively), and among beneficiaries under the age of 65 with disabilities (63%) in 2013.

Exhibit 8.  Median per capita home equity among Medicare beneficiaries varies by beneficiary characteristics in 2013

Exhibit 8. Median per capita home equity among Medicare beneficiaries varies by beneficiary characteristics in 2013

Median per capita home equity among beneficiaries with home equity was $97,650 in 2013.  Among beneficiaries with home equity, median home equity values were much higher among white beneficiaries ($106,100) than among black beneficiaries ($52,600) or Hispanic beneficiaries ($60,450).  Median home equity among beneficiaries under age 65 and disabled with home equity ($45,900) was less than half the median home equity among seniors with home equity ($106,350), including beneficiaries ages 85 and older with median home equity of $104,450 in 2013.  Among beneficiaries with home equity, median home equity was highest among married beneficiaries, but on a per capita basis, median home equity values were higher among widowed beneficiaries  ($140,050) than among married, divorced, or single beneficiaries ($80,700, $105,750, and $92,550) in 2013.  Similar to income and savings, median home equity was also higher among beneficiaries with more years of education, and the median home equity of college-educated beneficiaries ($142,900) was more than double the median home equity of beneficiaries with less than a high-school education ($57,350) in 2013 (Table 1).

In 2030

Home equity values among Medicare beneficiaries in 2030, adjusted for inflation, are projected to be moderately higher than they are in 2013, with much of the growth in home equity values among people in the top decile, although the share of beneficiaries with home equity (79%) is projected to remain flat (Exhibit 9).  Median home equity is projected to grow by $5,000, or seven percent, from $66,700 in 2013 to $71,700 in 2030, after adjusting for inflation.  In contrast, among beneficiaries in the top five percent of the home equity distribution, median home equity is projected to be 43 percent higher among the next generation of beneficiaries than among the current generation, growing by $172,850, from $398,500 in 2013 to $571,350 in 2030, after adjusting for inflation.  As a result, the distribution of home equity values is projected to widen over time.

Exhibit 9.  Growth in per capita home equity is projected to be concentrated among beneficiaries with more in home equity

Exhibit 9. Growth in per capita home equity is projected to be concentrated among beneficiaries with more in home equity

Savings of Medicare Beneficiaries Conclusion