The baby boomer generation is aging, with the oldest members turning 73 this year. And they’re having a significant impact on the housing market.
Between 2012 and 2017, the number of households headed by individuals over age 65 increased from 27 million to 31 million. Seniors make up a large portion of today’s homeowners, and so agents must be thoughtful about the elderly when providing services. A new report by the Joint Center for Housing Studies of Harvard University (JCHS), Housing America’s Older Adults 2019, highlights the current state of the aging demographic, giving real estate professionals a look at the challenges and opportunities for best serving this segment of the market.
The Demographics
Between 2018 and 2028, JCHS predicts that the number of households aged 75-79 will go up by 49 percent, and by another 20 percent between 2028 and 2038. The future could also see increased diversity in this age group, with Hispanic households rising from 7 percent in 2018 to 12 percent in 2038. And black households are predicted to increase 10 percent to 12 percent, with Asian/other households increasing from 5 percent to 7 percent.
Living arrangements are also shifting. Most adults who are retirement-aged are living in small households, with 35 million living either alone or with a spouse or partner in 2017. And as this segment gets older, their chances of living alone increase. Those in their 80s and over make up 57 percent of elderly homeowners who live on their own. This increase in a population that brings in lower incomes than couples, as well as higher disability rates, puts added stress on the market for affordable housing, especially units that offer supportive amenities.
Housing Needs
Mobility is one of the biggest challenges for the elderly population, but there’s a lack of amenities catered to assisting in this respect. In terms of inventory, there’s not enough housing for this segment of the market, the JCHS reports. In 2011, only 3.5 percent of all U.S. homes had accessibility features such as grab bars or handrails in the bathroom, extra-wide hallways and doors, and a bedroom on the main level.
For those interested in aging in place, renovations are a must. In 2017, 10 percent of individuals aged 65-79 and 14 percent aged 80 and over took on at least one home renovation project to help with accessibility issues. But for much of the population, there’s simply not enough money for that.
“Commitments to create age-friendly communities and some recent funding for affordable housing construction for older adults are promising starts,” said Chris Herbert, managing director of the JCHS, in a statement. “But the time for innovation—in the design, finance, construction and regulation of housing—is now. The quality of life and well-being of over a quarter of the U.S. population will depend on it.”
Income Challenges
The number of cost-burdened individuals over the age of 65 is rising. From 2016 to 2017, this number increased by over 200,000 to almost 10 million, states the report. Increased debt levels are putting pressure on dwindling retirement funds. In 2016, 46 percent of homeowners between the ages of 65-79 carried mortgage debt, with a median balance of $77,000. This is a drastic increase from just three decades ago when only 24 percent of homeowners in that age range still had mortgage debt.
“The falloff in homeownership rates among those approaching retirement, and the elevated levels of mortgage debt among those who do own, is concerning,” said Herbert.
Help Is Needed
This population is facing a growing need for housing inventory that provides accessibility support, as well as monetary assistance to help offset increased debt loads and low retirement incomes.
“Addressing these issues will require concerted action at all levels of government,” said Jennifer Molinsky, a senior research associate at the Center and lead author of the report. “This is especially true as the leading edge of the baby boomers reaches their 80s in the next decade and the need for affordable and accessible housing increases.”
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. Â
Being a full time Realtor (for the past 30 years and still working) as well as one of the oldest Baby Boomers generation (1947 husband and 1945 me) these concerns are my biggest at this point in my life. Housing for seniors seems to be either an apartment in an over 50 complex or an apartment. Staying in place at home requires changes to the floorplan, interior doorways, entryway, bathroom, etc. Finding reputable contractors is a priority. I would be happy to be part of any questionnaires etc. to give my input.
My background as an interior designer for 20 years and a full time Realtor for the past 32 years, has enabled me to deal with some of the difficulties found by seasoned citizens when getting older has us needing to make changes in our environments. I am also a Certified Seniors Real Estate Specialist, a designation I have earned through education and practice. Arizona is my home and I would be happy to participate in any discussion or answer questions and provide info about our wonderful state or senior issues in general. I’m always here to help!
My Husband and I are from the era of 1943. I am a working realtor for the past 37 years (still working) and that is a big issue in finding affordable housing for people without down grading them to 2 or 3 rooms. It is a big concern for my husband and myself as to where we will retire. Housing and living is very expensive in Massachusetts. RISmedia has good and up to date articles for issues facing people daily and this is greatly appreciated. I also would be very happy to give my input to any questionnaires, etc. that you may have. Thank you Judy
I am a leading-edge Boomer who just turned 72 and I am an Associate Broker and co-owner of Active Adults Realty in Delaware. All of my 18 agents and myself are SRES. As our name says, we specialize in working with active adults that are preparing for or entering retirement. Many are relocating to Delaware from the surrounding states in the Mid Atlantic Region. What I have found interesting is that most of our clients are not really buying smaller homes when they first retire and relocate. About half are not even buying in a 55+ community. I too would be happy to participate in any way. My blog focuses on this demographic and so do my videos.
With 33 yr active in the local MLS, I’ve seen plenty of older folks who have stayed in their home too long and it starts to consume them because they let the maintenance go since they either can not afford it, or can not do the small labor jobs around the house. Also owning rental units, it makes sense to refurb them to older adult needs (wide hallways, ramped or sloped entry over steps). When to cash out and live on the equity of their home is a loaded question vs staying in the home then can not come up with the money to put a new furnace or roof on. Reverse mortgages are bad ideas for many seniors, but sometimes the only option. Living in the home seems cheap to them when it’s paid for but not keeping up with updates or repairs can be an equity killer for elderly owners.
I, too, am a Realtor since 1970. We have been in our home for 47 years. 15 years ago we gambled with a reverse mortgage. Now, one of us has to die in order to get a stepped up basis for capital gains. This would amount to near $1,650,000 which would eat up any equity we now have. We would love to move to a smaller home but are trapped.
I have been in real estate for over 35 years, SRES designation and the problem I’m seeing more and more is husband and wife still living over 82 years old, worked all their lives, have a nice retirement but now can’t maintain a large home, require caretakers, but can’ afford to rent or buy and “Don’t qualify for Senior housing because their retirement “Exceeds” maximum income! Yet to rent and have care givers takes all their income. ALL SENIOR HOUSING SHOULD BE BASED ON NEED, NOT INCOME.! Legislation needed to change that!
Wonderful to see more articles on the Aging Population. The impact is going to hit us hard and fast. We already are experiencing a major shift, yet little is said. Isolation will be a major concern, along with affordable healthcare, and housing. The same quality of life for birth needs to be offered as we age out. @NAWRB – Desiree Patno