Delivered February 12, 2020. Contributor: Sunali T.
To determine the number of people that are asset rich and cash poor in the US.
According to Patch Homes, for most Americans, 70% of their wealth is tied to the value of their homes.
The article further states that "because houses are usually the largest and most expensive asset people buy, much of their money is invested in their homes" and that the rising value of their home does not equate to cash in hand, hence the term "asset rich, but cash poor."
Market Watch has reported that based on the study findings from Attom Data Solutions, nearly 14 million Americans are "equity rich,"meaning that at least 50% of their equity was derived from the value of their homes in 2017 ("where the combined loan amount secured by the property was 50 percent or less of the estimated market value of the property")
Reverse Mortage Daily has cited a survey conducted by Hometap, which found that 1 in 5 American homeowners constantly feel "house rich and cash poor." 3 in 4 Americans had said they felt so someofthe time. While nearly 60% of homeowners across all generations feel there is no easy solution for being house rich and cash poor.
Based on the assumption that the equity rich, cash poor population is most likely mortgaged home-owners (54.5 million), we can calculate that around 11 million people (1 in 5*54.5 million) would clearly identify themselves as being asset rich, cash poor.
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