Low Texas Mortgage Costs Boost Number of Retirees

Watch out, Florida.

Low Texas mortgage costs and a high quality of life mean the Lone Star State has emerged as the nation’s No. 2 retirement mecca, vaulting over Arizona and California.
And the Lone Star State is gaining on the Sunshine State.

The North Carolina Center for Creative Retirement, nationally known for tracking retirement migration trends, studied 2005 data from the U.S. Census Bureau on the number of Americans who move out of state to enjoy their golden years.

Texas, which was the No. 4 destination based on 2000 data, has leapt past No. 2 Arizona and No. 3 California. Texas attracted 6.8 percent of the migrant retirees in the 2005 data, up from 4.8 percent in 2000.

Florida’s share is much higher but shrinking. It drew 16.6 percent of retirees in 2005, down from 19.1 percent in 2000.

“Older Americans who are looking to relocate upon retirement continue to move to sunny climes, but Texas has gained an edge over other Sun Belt states,” said Bill Haas, the study’s author.

Texas’ lower home loan and other costs give it a distinct advantage, he said, especially over states like California and Florida.

There, increases in home prices over the last few years hit bubble proportions, making them difficult to afford for many retirees and residents alike.

“Hurricanes, rising home prices, higher homeowners insurance premiums and overcrowding are making Florida a less desirable destination,” Haas said.

Where retirees settle down is becoming a matter of keen interest among development officials who see gold in the silver-haired generations.

The study said the Texas economy is reaping an additional $751 million annually from older migrants who bring their investments, pensions and Social Security payments.

Ron Manheimer, executive director of the Center for Creative Retirement, predicts a heated competition among states for older adults who plan to pick up stakes.

“Retirees can be an economic engine,” he said. “The money they’re spending is creating jobs in their new communities.”

Consultant Gene Warren estimates the average senior household spends $36,000 a year and pays $3,000 in state and local taxes - about the same economic benefit as adding a job and a half in a community.

So the fact that it’s still affordable to get a home mortgage loan in Texas is actually fueling its growth. Can that pattern be sustained?

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