Why We Need Home Price Stabilization Now

A recent story on Foxnews.com highlighted an issue I’ve been talking about for a long time now. As the baby boomers continue to retire, it’s becoming clear that the 401(k) plans that many thought would carry them through retirement won’t even come close. According to the story:

“The median household headed by a person aged 60 to 62 with a 401(k) account has less than one-quarter of what is needed in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal.”

Some retiring homeowners will be able to tap equity in their homes through a reverse mortgage, giving them the benefit of an asset they’ve spent much of their lives buying. But that won’t provide much support if home prices across the country continue to erode.

Some baby boomers are putting off retirement, hoping that they can save up enough money to eventually retire. Costs for healthcare are going up even as the government contemplates cutting benefits.

I’ve said before in this space that home prices are critically important to the recovery. This is what I was talking about. I’m looking forward to your take on this.