High Spending On Housing Hurts Seniors’ Health

Housing costs are a major consideration for older adults weighing a move to senior living, and a new report sheds light on the surprisingly high amount they’re spending on housing compared to health care.

Higher housing costs can be an obstacle for financial security, even when older adults own their homes outright, the Urban Institute report, called Housing Costs and Financial Challenges for Low-Income Older Adults, revealed. The Urban Institute is a policy and research firm that works to solve urbanization challenges.

Over the years, more older adults have been able to live independently and fewer are in poverty, mostly due to higher Social Security benefits, the report stated. Yet, as health care needs increase, older Americans are still spending more than twice as much on housing than health care.


In 2013, Americans 65 and older spent 12% of their income on health care compared to 28% on housing costs, according to the report. Low-income adults devoted three times as much of their income to housing—36% in 2013—compared to health care. Housing costs include insurance, property taxes, maintenance and repairs, mortgage interest and charges and utilities.

Housing costs are not typically part of the discussion of financial risks for seniors, which mainly focuses on health care needs and expenses, the report authors wrote. Their findings emphasize that housing costs are the biggest financial obstacle for older adults, and the risks increase with age. As seniors get older, their health care needs and costs tend to rise, and high spending on housing can reduce their ability to pay for these services or save to cover future health needs.

“Housing costs can significantly reduce financial security at an older age,” the report states.


Long-term care is of particular concern for older adults. Few Americans have long-term care insurance, though the report estimates that 17% of people turning 65 today will spend more than $100,000 on long-term care services in the future.

“The single greatest financial risk that older people face is the possibility of developing disabilities and needing long-term services and supports, because this care is expensive and there are few financing options,” the report states.

When older adults need long-term services, they may be allocating too much of their retirement income on housing costs. While homemaker services cost less than a year-long stay in a nursing home, the median cost for these services comes to $14,000 annually. Even when homeowners own their homes outright, without a mortgage, they still spend significantly more on housing than health care services. In addition, housing costs can increase if older adults need to make modifications to their homes to accommodate wheelchairs or other care, the report noted.

The Urban Institute suggested several policy solutions in the report for solving housing needs for older adults. Policy initiatives to help cover the costs of health care as well as homeownership—and even renting—for low-income older adults could boost financial security for seniors, the report authors wrote.

Written by Amy Baxter

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