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Housing has become increasingly expensive over the past several years. Factors like rising interest rates and dwindling supply have raised costs significantly. However, seniors are feeling the pain even more than others for many reasons.
USA Today reported that more older adults will experience housing insecurity in the coming years unless the country dramatically increases its supply of affordable homes for people aged 65 and up. Seniors make up roughly one-fifth of the U.S. population, which means at least 1 in 5 people are in jeopardy.
More Housing Insecurity for Seniors Is Coming
A recent report from Havard titled “Housing America’s Older Adults 2023” indicated that a growing share of people on a fixed income will face trouble affording housing in the coming decade. This is further highlighted by data showing that 17 million U.S. households will be headed by someone aged 80 or older by 2040.
“There is a good news part of this, in that it’s not a bad thing that there are a lot more older people living longer,” explained Jennifer Molinsky, the report’s lead author. “We just don’t have the housing and supports that we need for this growing population.”
This is poised to be a serious crisis as people in their 80s typically have the lowest incomes. Combined with affording at-home care and medical expenses, affording housing at the same time may prove difficult for many.
Growing Number of Seniors Spend More Than One-Third of Their Income on Housing
The latest Harvard report showed that the number of people aged 65 or older who are cost-burdened has reached a record high. This means that they spend more than 30% of their income on housing, whether a mortgage or rent payments. Here are some important stats to note:
- In 2016, 9.7 million older adults were cost-burdened. Fast forward to 2021 and that name number has risen to 11 million.
- In 2021, 56% of older renters were cost-burdened, which represents 4 million households. Meanwhile, 26% of older homeowners were cost-burdened in 2021.
- In 2022, more than 40% of homeowners between the ages of 65 and 79 were still paying off a mortgage. For homeowners aged 80 and older, that number was just over 30% in 2022.
The reality is that there are more older adults who will have continued housing costs until later in life, and the number of those who are renters will increase as it becomes more expensive to purchase a home. Sadly, inequality is a factor when it comes to homeownership. There is a higher overall rate of homeownership among white people than African-Americans.
Seniors Can’t Afford Housing and At-Home Care
Harvard researchers found that in 97 U.S. metropolitan areas, less than 1 in 5 adults age 75 or older could stretch their budgets enough to pay for both housing and care. This data indicates that very few older Americans can afford both.
To add, more than half of people over the age of 80 report having health issues, ranging from cognition, hearing, mobility or vision problems. Having health issues makes it increasingly difficult to afford housing, especially if you have to sacrifice a part-time job or side hustle which helps supplement your income. If you’re spending more on medical expenses, then funds you’d use for housing dwindle even further. This is especially true for those on a fixed income.
The growing housing affordability crisis is here, and seniors are poised to take the biggest hit. It remains to be seen if there will be further government intervention, such as the creation of new affordable senior housing, to mitigate the effects of this crisis.
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