Homeownership Rates Peak Among Retirees at 81%, But Paying Off Mortgages Is Complex

The Federal Reserve's Survey of Consumer Finances reveals that homeownership rates peak among adults aged 65 to 74, with 81% owning their home outright.

Investopedia notes that many Americans hope to own a home by the time they retire, as it can lower living costs. However, prioritizing mortgage payoff isn't always the right move for everyone.

The share of homeowners increases across older age groups: 45% among adults aged 25-34, 64% among those 35-44, and 81% among those 65-74. It declines at older ages due to reasons such as selling a home after losing a spouse or moving to assisted living.

Roughly 73% of homeowners aged 65-69 have no mortgage or home equity loan left to pay off, increasing to 83% for those 75-79 and 92% for those 85 or older. This is due to the longer time they've had to pay down their loans.

Investopedia suggests that paying off a mortgage can be appealing when retiring, as it eliminates a large monthly expense. However, keeping a mortgage with a fixed rate lower than what one could reasonably earn on a low-risk investment may make more sense.