Owning a home and living grandly in it is a major piece of the happiness puzzle for millions of Americans. It can also be a burdensome responsibility.
In fact, I’ve found in my years of reporting on real estate, homeownership and mortgage rate trends that buying and owning a home is the largest financial commitment that most Americans will make in their entire lifetime.
Bestselling personal finance author Suze Orman has a strong opinion on owning a home as one approaches retirement that I believe is a wise one for which older Americans would be wise to pay close attention.
“Let me be clear about how I feel about homeownership as you get closer to retirement,” Orman wrote on her Facebook page. “If you know you have a home you plan to keep for the long run — you feel it, you know it — then in my opinion your number one goal should be owning that home outright by the time you retire.”
“Your biggest expense is your mortgage. And if your retirement income is just going toward making mortgage payments, then we’re in trouble,” she continued. “That’s why I want you to get rid of expenses in retirement — especially the mortgage.”
“That’s how you make your money, make more money.”
Suze Orman sends message on mortgages to homeowners
Orman shares that she understands staying put in one’s home during retirement is a dream for many, rather than downsizing or moving someplace else.
“But from a financial standpoint, it can be tricky,” she wrote. “You know I have always insisted that if your plan is to ‘age in place,’ you must have the mortgage paid off before you retire and make any necessary renovations to ensure you can stay safe as well.”
Orman cited a key report from the Center for Retirement Research at Boston College that outlined a new financial challenge for those who decide to sell their home.
It is an important one for those who make the difficult financial decision not to stay because of their mortgage burden in retirement, but to sell their home later in life.
The report found a negative relationship between a home seller’s age and the amount of money for which their home will sell.
“An 80-year-old seller realizes about 0.5 percent per year less than a 45-year-old, which corresponds to a 5-percent-lower sales price for a home with the mean holding period (11 years),” the Center for Retirement Research (CRR) discovered.
“On the typical home price of $400,000, this reduction amounts to a loss of $20,000.”
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Center for Retirement Research explains home-selling disparity
The Center for Retirement Research found two factors that contribute to this outcome.
“First, homes sold by older people are less likely to be well-maintained,” according to the report. “Second, older sellers are more likely to sell their homes off-MLS and sell to investors.”
MLS refers to Multiple Listing Services, a private, cooperative database used by real estate professionals to list, search, and share information about properties for sale.
“Here, policy changes could help: Reforms introduced in Illinois to make private listings more transparent significantly reduced both the prevalence of private listings and the magnitude of the age gap,” CRR reported.
Researchers tested whether private listings actually depress sale prices by examining a rule change at Midwest Real Estate Data (MRED), the largest MLS in Illinois and one of the biggest nationwide.
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As private listings became more common — and more controversial — MRED introduced a policy that let brokers advertise homes before they hit the full MLS, while still maintaining enough visibility to safeguard sellers’ interests.
“This change led to fewer private listings across all sellers in Illinois,” according to CRR. And, the return discount experienced by older sellers fell by half, from -0.8 percent before the policy change to -0.4 percent after the change.”
“In short, by making private listings more transparent, the policy reduced the frequency with which agents act against the interest of their clients,” CRR added.
“And this change was most beneficial for older sellers, who had been most likely to suffer reduced returns from private listings before the change.”
Related: Suze Orman’s 5 best pieces of financial advice
Suze Orman urges homeowners to plan for avoiding hidden costs
- Homes owned by older adults often show deferred upkeep, with mechanical systems that haven’t been serviced as consistently and fewer major improvements over time. Regular maintenance remains essential, even if you plan to stay put, because postponing repairs usually leads to higher costs later.
- Outdated kitchens and bathrooms add to these hidden expenses. Deciding whether to renovate depends on both personal needs — such as making a bathroom safer as you age — and your financial situation. While refreshed spaces can boost a future sale price, the investment has to be financially sound.
- When it’s time to sell, involving family can make a meaningful difference.
- Older homeowners are more likely to accept off‑market, private offers instead of listing on the local MLS. That choice often reduces competition and limits exposure, which can mean leaving money on the table. A broad pool of buyers typically leads to stronger offers.
- It’s understandable that, in your 50s, 60s, or 70s, the idea of avoiding the hassle and taking the first easy offer might feel appealing. Family members — adult children or even grandchildren — can help ensure the home is properly marketed and reaches the widest audience when the time comes.
(Source: Suze Orman)
Related: Zillow predicts big mortgage rate shift, homebuyer activity
