By Jane Bryant Quinn, AARP Bulletin
To rent or buy again? That is the question retirees face when it comes to real estate and downsizing.
It's zero hour. You've decided to sell your house and move to something smaller or to another town. As a homeowner, you naturally think of buying again — a house or maybe a condo. But should you? Maybe you should rent instead.
Ownership is solidly entrenched among retirees. They weren't even shaken by the real estate collapse. From the peak of the housing bubble in 2006 to the present, the rate of homeownership for people 65 and up has held steady at about 80 percent, the Census Bureau reports. It runs to over 90 percent among married couples in which one person is 65 or older.
For those 55 to 64, however, it's another story. The portion who own the place where they live has dropped to 76 percent, compared with 81 percent in 2006. Some in this age group switched to renting because they couldn't manage a mortgage anymore. Others, however, rent by choice.
That leads to the question of how to dispose of the proceeds when you sell a house. You can use part or all of it to buy another house or condo, with or without a mortgage. That pot of money is now tied up. You could tap it at some point in the future, by taking a home equity loan or reverse mortgage, but that probably isn't your plan.
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