The number of cost-burdened senior households is expected to rise sharply in the next 20 years as the baby boomer generation marches into retirement, and the older they get, the less likely they are to move, says the Joint Center for Housing Studies of Harvard University in its 2012 The State of the Nation’s Housing report.
With 10,000 people turning 65 each day until about 2030, according to U.S. census figures, more and more households are populated by seniors—most of whom are planning on aging in place.
“The leading edge of this group reached 65 in 2011, entering the phase of life when they are less likely to move to different homes,” says the study.
Senior households that are considered “cost-burdened” jumped from 3.1 million in 2001 to 4.1 million in 2010, and that number will continue to grow, the study says—”escalating the need for assisted housing and supportive services for the elderly.”
Across all demographic groups, net household wealth plummeted $14.3 trillion from 2006 to 2011, thanks in part to a 57% drop (representing $8.2 trillion) in household wealth.
While the future of housing is tied into the boomer generation, they’re going to play a smaller part in setting the pace of housing demand in the coming years, says JCHS, and if they do move, it’s usually to smaller homes.
Despite receding dominance in the new home market since the mid-2000s, seniors have maintained homeownership rates more than any other age group. Rates have held steady for 65+ households, at around 81%. Meanwhile, among households up to age 44, the homeownership rate dropped more than five percentage points; for 45-54 households, it dropped 4.5 percentage points, and 3.2 percentage points for 55-64-year-olds.
With higher homeownership rates comes a greater number of older households carrying more mortgage debt “well into” their retirement years, says JCHS. Between 1999 and 2009, the share of 65+ homeowners with mortgages increased from 24% to 35%, while their median mortgage balance increased from $42,700 to $55,900.
Written by Alyssa Gerace