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The US population is aging. Within the next decade, older adults will outnumber children for the first time in American history. As Americans live longer, their housing needs will change, but our current housing market is ill prepared for this demographic shift, according to Linna Zhu and Amalie Zinn of Urban Wire/Institute.
Today, senior households—many of whom are on fixed incomes—are facing a combined crisis of housing affordability, accessibility, and availability. As the country’s population ages and without action by policymakers, the consequences will be severe.
Over the past two decades, the number of senior households considered severely cost burdened—those spending more than half their income on housing—has nearly doubled, rising from 5.2 million to nearly 11.7 million, according to American Community Survey data. And the share of severely cost–burdened senior households has increased. In 2000, 11.5 percent of households headed by someone 50 or older were severely cost burdened. By 2020, the share increased to more than 16 percent.
Housing cost burdens are driven not only by one’s rent or mortgage payments, but by the cost of utilities, home insurance, property taxes (PDF), maintenance, and other fees.
Some demographic groups are more affected than others. Renter households are more likely than owners to be cost burdened at all ages. Older seniors, those 75 and older, are more likely to be cost burdened than younger seniors. Other research finds that rising insurance premiums have also made senior living communities more expensive.
According to the Urban Institute analysis of 2000–23 American Community Survey, households are severely cost burdened if they spend more than 50% of their income on housing costs.
Unlike younger adults, who can change their spending in response to rising cost burdens, seniors, especially those on fixed incomes, have less flexibility. For older adults facing increased or unexpected housing costs, limited budgeting alternatives can lead to homelessness. Between 2019 and 2022, the share of older adults experiencing homelessness increased 37%.
Survey data suggest that most older adults want to remain in their current homes and communities as they age. But affordability and accessibility present challenges.
According to the latest data from the American Community Survey, more than 75% of senior households live alone or with only one other person, yet 60% of these households live in homes with at least three bedrooms. These homes may not only be too big—they might be too old or in poor condition. Nearly half of large homes rented and owned by seniors were built before 1980 and might require serious renovation or modification.
The Urban Institute analysis of 2020 Health and Retirement Study noted that a household is considered lacking the financial assets to modify their home if their financial assets are below the median out-of-pocket expenses paid for accessibility modifications by other seniors of the same tenure.
According to data from the latest Health and Retirement Study, 34% of households headed by someone older than 50 lack the financial resources to cover the median out-of-pocket expenditures on home modifications. Renters in particular are more likely to lack the resources for renovations, with 58% of older renting households unable to cover median expenditures compared with 27% of homeowners.
Even if older adults want and have the means to move, the severe housing supply shortage has led to a limited available housing stock, particularly at the affordable end of the market. Only 10% of the country’s housing units are ready to accommodate older people, as most homes have entryway steps, only upstairs bedrooms and bathrooms, and inaccessible bathrooms.
Research suggests that many older adults might want to move closer to their children, meaning they might be searching for housing in high-cost areas with amenities important to younger people, like employment opportunities and strong school districts. Older adults that require greater levels of care might face even more barriers, as the cost of independent- and assisted-living communities are prohibitively high, in part because of the high cost of housing development.
Increasing affordable housing supply—and especially the supply of smaller, accessible homes in areas where seniors want to live—can improve the well-being of senior households. To ensure that senior households can move if that is best suited for their needs, federal, state, and local policymakers can
- change zoning regulations to allow for multigenerational and intergenerational housing, as well as backyard accessory dwelling units;
- ease the way for more homes to get built, particularly at the affordable end of the market; and
- ensure the Federal Housing Administration has the resources to increase lending for senior living and health care facilities.
The housing needs of seniors will continue to evolve, especially as the country’s demographics shift and senior households make up a larger share of the population. To prepare for the coming decades—by building the necessary homes and making policy changes—we need research to make future needs clear.
Projections of future housing needs among older adults—especially those that account for climate vulnerability, insurance cost increases, health status, social connections, and changes in senior incomes and benefits—could provide crucial insights. The collection and publication of population-level data on senior housing decisions, challenges, and outcomes at detailed geographic levels can support this work and clarify problems and solutions.
Information and data provided by Linna Zhu and Amalie Zinn of Urban Wire/Institute.
If you have questions regarding housing for seniors, contact your local Seniors’ Real Estate Specialist®, Karen Daugerdas, Coldwell Banker REALTOR® at 847.494.1102 or karen.daugerdas@cbrealty.com.
