If they were selling their home today, 30 percent of boomers would have to bring money to their closing to cover mortgage and transaction costs.
“As a result of the collapse of the housing bubble, millions of middle class homeowners still have little or no equity even after they have been homeowners for several decades. These households will be in the same situation as first-time homebuyers, forced to struggle to find the money needed to put up a down payment for a new home,” says David Rosnick and Dean Baker of the Center for Economic Research in Washington, D.C. The two are co-authors of a new report, “The Wealth of the Baby Boom Cohorts after the Collapse of the Housing Bubble.”
According to the report, the median household with a person between the ages of 45 to 54 saw its net worth fall by more than 45 percent between 2004 and 2009, from $172,400 in 2004 to just $94,200 in 2009 (all amounts are in 2009 dollars). If the median late baby boomer household took all of the wealth they had accumulated during their lifetime, they would still owe approximately 45 percent of the price of a typical house and have no other assets whatsoever.
“The collapse of the housing bubble, which led to the current recession, has already destroyed almost $6 trillion dollars in housing wealth for homeowners,” says Baker, who testified before the Senate Special Committee on Aging this week. “This reality is compounded by the recent collapse of the stock market. The result is that many baby boomers will only have Social Security and Medicare to rely on in their retirement.”