A new study by The Center for Housing Policy takes a detailed look at America’s older population and the housing needs those aging baby boomers will require.
From the start, the study makes it clear that the number of Americans joining the older ranks is substantial. By 2050, the 65 and older population will have grown by 120 percent, from 40 million to 88 million, or, one in every five Americans will be over the age of 65.
At the same time, the 85+ population will triple to 19 million – and like the 65+ demographic, they will have housing needs, the study emphasizes.
“Demand for housing will shift dramatically and the need for services to help older adults age in place will grow exponentially,” the study states. “Are we prepared?”
The study goes on to highlight the many unique dimensions to housing an aging population. For instance, for those aged 65 to 84, the homeownership rate is more than 80 percent, which is 15 percent higher than the nation’s median rate of homeownership.
Though the percentage of homeowners with a mortgage decreases as the sample size ages, a new AARP study suggests that such privileges may not be extended to baby boomers joining the aging demographic in the 38-year block the study focuses on. From 2000 to 2009, AARP found that the share of homeowners aged 50 or older who had a mortgage increased by a substantial amount – mortgage holders who, mostly likely, are either underwater on their mortgages or grappling with much higher housing costs than their parents.
That finding makes particular sense when coupled with another one of the study’s findings.
“Both the share of older households spending more than 30 percent of their income and the share that are “severely cost-burdened”— meaning they spend more than half (50 percent) of their income on housing — increase with age,” the study reported, and that was even when factoring in older homeowners who have paid off their mortgages.
The study concluded with several recommendations. One recommendation was for a new trend in home design, one that emphasized “universal design principles” that could apply to younger, middle-aged and older homeowners. Another recommendation involved dramatically increasing the housing options available to older prospective buyers, from assisted living residences, to retirement communities, to developments that use integrated services via the PACE model.
All of this information leads to an inevitable question – how does this impact Realtors and housing policy? It matters because it suggests a radically changing environment for agents, one with an older buyer demographic with new needs and new interests; it suggests a new potential for property, one with different services and design schemes; and it may even suggest new types of financing, given the financial statuses of many of the homeowners in question. So though most of those topics involve the future, it will be a much different environment than the one presently available.