JCHS Report: Addressing Elderly Homeownership Challenges

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.

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