At-Risk Generation: Older Adults Face Housing Challenges  

They’re the largest demographic group of homeowners, with 75% owning homes. They have the most home-buying power. But the baby boomer generation–those 65 and older–are facing a serious challenge as they live longer, healthier lives: a need for affordable and accessible housing.

It’s hard to believe that the generation with the most purchasing power and homeownership rates faces a housing challenge. But, the study on older adults from the Joint Center for Housing Studies out of Harvard University sheds light on a looming crisis. The main question is: can baby boomers afford the increasing costs of medical care and the housing they need to live comfortably in their golden years? 

The state of homeownership in aging America

In the 2023 survey of home buyers, the average age of a repeat homebuyer was 58 years, just seven shy of the retirement age. Some 70% of buyers did not have a child under 18 in their home. And 19% of home purchases were senior-related housing, such in age-restricted communities or assisted living complexes. It suggests that these older buyers are positioning themselves for retirement. 

Other numbers back that up, such as:

• 11.2 million households in 2021averaged 65 years or older
• The number of households headed by someone over 80 is expected to double by 2040. 
• In 2021, 80 percent of older adults lived alone or with a spouse.

Understanding why this puts the baby boomer generation at risk of a housing crisis requires looking at multiple factors. 

Retirees live on a fixed income

The nature of retirement means relying on savings and benefits to cover personal needs and wants. That’s where “fixed income” comes into play. Retirees must live off their savings for the remainder of their life–a timeline that no one knows for certain. By one estimate, baby boomers have a life expectancy of 79 years. 

That’s much longer than to the estimated 63 years old when they were born. It’s great that people are living longer, but the problem for boomers is that many haven’t saved enough to cover their living costs as they age. Over a quarter have saved less than $100,000. Even more distressing? The Insured Retirement Institute found that 45% of boomers have no retirement savings.

Incomes also drop off as the individual ages. In 2022, the median income for households 65 and older was $50,000. But for those 80 and older, it was $37,100. This happens for reasons such as fully retiring, reducing their workloads, or losing a second income due to widowhood.

Costs keep rising 

Retirees may have a fixed income, but the cost of living doesn’t stay fixed. Single-family homes appreciate at an average of 3-5% annually. Food costs, not factoring in dining out, rose 5% from 2022 to 2023 alone.

Personal healthcare spending increased an average of 4.8% annually from 2014-2020. But as people age, they need more medical care. The per-person personal health care spending by persons 65 and older was $22,356 in 2020. That’s 2.5 times more than the working-age adult–$9,154.

Each year a person remains living, their expenses keep increasing even if they remain healthy. Add in a medical challenge, and the cost of living for that year will rocket upward dramatically, draining savings even further.  

Healthcare challenges

We may be living longer, but the US Centers for Disease Control and Prevention (CDC) warns that we’re not necessarily living healthier. From 2002-2013, high cholesterol, hypertension, and obesity all increased in adults aged 55-64. Half were living with high cholesterol and hypertension. All of this group is now over 65. 

The number of complex medical care needs is also rising. Take Alzheimer’s disease, whose number of diagnoses could triple by 2050 to 14 million people. 

By 2060, over 98 million Americans will be over 65–nearly one out of every four citizens. By the time they reach 80, around 30% will experience challenges with daily independent living. 

Other studies found that most older adults will need some long-term care services later in their lives, for an average of three years. That quickly becomes costly. The National Investment Center for Seniors Housing and Care (NIC) found that in 2021, the median cost of assisted living was $63,000. Only 13% of households could afford this average. However, the services included and the actual cost varied widely across the country. Add in specialized care, and costs increase.

Ongoing income gaps 

Income inequality is an ongoing societal challenge. The older generation hasn’t been exempt. Rising mortgage debt indicates that even those who own a home may have less equity than previous generations. Seniors have used their homes’ equity to cover upgrades that keep them at home as they age in place or to pay for major medical bills. 

Unfortunately, the divide in income and the potential to save becomes more pronounced when broken into racial and income demographics. Homeownership has a 19-point gap between over 65 white households and black-identifying households. Older black and Hispanic groups also have high rentership rates, at 37% and 34%. And their median household income is 80% less than that of white, older adults.

What We Are Facing Right Now

Baby boomers are increasingly cost-burdened. In 2021, 11.2 million adults spent over 30% of their income on housing costs. That was an all-time high. Even more challenging is that many spend over 50% of their income on housing. Homelessness is also increasing.

Boomers’ needs increase with age. These include support for daily living and daily self-care like bathing and dressing. Yet only 14% could pay for a home health aide to visit daily to help with self-care tasks.

Even older adults capable of independent living find benefits in housing that supports their needs. These include single-level living or accessibility features such as ramps, brighter lighting, or wide spaces.

Meanwhile, the income inequality gap continues to widen. It’s more pronounced as you look to break down different demographics. African-American homeowners have a median home equity of $123,000 compared to home equity of $270,000 for Asian, multiracial, or other identifying homeowners. Home equity can be an asset to finance upgrades to make a home more accessible for aging in place. 

Those with the lowest incomes are most likely to struggle to afford a senior housing option and medical care, even with government programs that provide help. However, even moderate-income seniors may struggle to pay for their care and keep a roof over their heads. 

That increases the demands on federal housing and medical assistance programs. The funding for these is limiting, resulting in only a third of seniors receiving the benefits they qualify for. NPR chronicled the story of a man who waited five years for a federal housing voucher. He was homeless in between.

Frequently Asked Questions About Housing For The Elderly

What is the best type of housing for seniors?

Keep reading for a list of the top senior living options:

Independent Living Communities

Independent living communities cater to active seniors who seek to maintain their independence while enjoying a range of amenities and social opportunities. These communities provide private residences and a lifestyle designed for those who do not require significant daily medical care but appreciate the convenience of a supportive environment. Residents benefit from services such as dining, housekeeping, and transportation, which enhance their quality of life while preserving autonomy.

Assisted Living Facilities

Assisted living facilities offer a balanced approach for seniors who need assistance with daily activities but do not require intensive medical care. These facilities provide support with activities of daily living (ADLs), such as bathing, dressing, and medication management, while fostering a sense of community. This setup allows seniors to enjoy a semi-independent lifestyle with the added security of professional support.

Nursing Homes

Nursing homes (also known as nursing home care or skilled nursing facilities) are essential for seniors who have extensive medical needs or chronic health conditions requiring 24-hour supervision. These facilities provide comprehensive medical care, rehabilitation services, and assistance with all activities of daily living (ADLs). This level of care ensures that seniors receive the necessary medical attention and support in a controlled setting.

Continuing Care Retirement Communities (CCRCs)

Continuing care retirement communities (CCRCs) offer a seamless continuum of care from independent living to skilled nursing, allowing residents to stay within the same community as their needs evolve. These communities are designed for seniors seeking a long-term living solution that adapts to their changing health and care requirements. This flexibility reduces the stress of moving between different care facilities and ensures continuity of care.

Home Care

Home care services enable seniors to receive professional assistance while remaining in the comfort of their own homes. This option is ideal for those who prefer to age in place and maintain strong emotional ties to their home environment. Caregivers provide medical and personal care tailored to the individual needs of the senior, making it a highly personalized and flexible option. This approach supports aging in place with a familiar and comfortable lifestyle.

Where is the best place for low-income seniors to live?

Florida, Arizona, Pennsylvania, and Ohio are among the best places for low-income seniors to live, offering a balance of affordability, diverse housing choices, and supportive services. See below for additional details:

Florida

Florida is highly regarded for its affordability and variety of living arrangements for low-income seniors, including subsidized housing and assisted living communities. The state also provides significant tax advantages as it has no state income tax, benefiting those on a fixed income. Florida offers numerous residential care facilities and housing choices, including subsidized housing options. The state’s senior living communities are well-equipped with multiple levels of care and community activities, enhancing both social interaction and quality of life.

Arizona

Arizona stands out for its low cost of living, favorable climate, and supportive residential care facilities. The Arizona real estate market offers a variety of affordable housing choices and senior living communities with lower overall healthcare costs. SeniorLiving.org notes that Arizona’s senior living facilities, including subsidized housing, make it a practical destination for low-income seniors. The state’s senior centers offer varying levels of care, including memory care and transportation services, enhancing seniors’ quality of life.

Pennsylvania

The Keystone State is an excellent option for low-income seniors due to its strong healthcare system, affordable housing options for the elderly, and comprehensive support services. The state features numerous services for seniors, including hospitals and senior care facilities that provide accessible and robust health care services. Additionally, Pennsylvania offers property tax rebates for seniors in need, which can significantly lower their living expenses. The state also offers extensive community programs and social services, including transportation and meal delivery, enhancing seniors’ overall quality of life.

Ohio

Ohio is a practical choice for low-income seniors due to its low cost of living and robust support networks. The state offers affordable living with housing options specifically tailored for low-income seniors, making it a budget-friendly option. Additionally, Ohio provides a variety of community services, skilled nursing care, and support networks that enhance the quality of life for seniors. To gain more information, the Ohio Department of Aging (ODA) provides a range of services and programs to support the well-being and independence of older adults across the state.

What are senior living apartments, and why are they growing in popularity?

Senior living apartments are specialized residential complexes designed to accommodate older adults, typically 55 and above, offering a blend of independence and accessibility.

These apartments cater to the unique needs of seniors by incorporating features like grab bars, step-free showers, and emergency call systems while often providing access to communal amenities such as fitness centers, social activities, and transportation services.

Their growing popularity stems from demographic shifts and changing preferences among aging populations. As baby boomers age, there’s a rising demand for housing that balances autonomy with convenience and safety.

Additionally, senior apartments offer a sense of community and social engagement, reducing feelings of isolation and enhancing quality of life. The increasing availability of senior-specific services reinforces this trend, making these living arrangements attractive and practical for many older adults looking for housing units with affordable rents.

What Aging America Needs

The Harvard University study proposes a multi-pronged solution is needed to address the current and future needs for senior housing. These include:

• Expanding programs that finance home renovations to help keep baby boomers in their homes longer. Massachusetts is an example.
• Zoning changes to allow more apartment-style buildings and affordable housing to be built. The data shows that the number of older persons turning towards living in multifamily buildings increases as they age to cut down on maintenance and increase cost savings. 
• Increase diverse household configurations for house-sharing, cohousing, or accessory dwelling units (ADUs).