Housing inequality is becoming more pronounced among older Americans as the number of older households continues to rise at unprecedented levels.
This was the conclusion of the new Housing America's Older Adults 2019 report released today by the Harvard Joint Center for Housing Studies.
Between 2012 and 2017, the number of households headed by someone 65 or older jumped from 27 million to 31 million and will continue to grow. At the same time, the number of older adults facing housing cost burdens reached an all-time high of 10 million. Meanwhile, homeownership rates are lower and debt rates are higher for those 50 to 64, as compared to earlier generations.
The NAHB 55+ Housing Industry Council is working to provide affordable housing to this segment of the population.
"Housing affordability affects all segments of the housing market, including older adults, who are often operating on fixed incomes once they retire," said council chair Karen Schroeder. "The flexibility to provide a variety of housing types and price points in the market provides more 55+ buyers with options to be able to age comfortably in a home that suits their needs.”
Even as builders continue their efforts to meet the growing demand of this market, the report shows ongoing wage disparity as lower-income households continue to fall further behind their higher-earning peers in income growth. Between 2012 to 2017, household incomes among the top 10% of wage earner age 65 and over increased by 22% while incomes of those in the bottom 10% fell by 4%. Additionally, the median income for the highest earners between the age of 50 and 64 set a new record of nearly $204,000 in 2017, while the median income of the lowest earners was just $14,400 – lower than the 2000 level of $17,100.
The report showed that there are significant differences between owners and renters when it comes to preparedness for retirement. In 2016, the median home owner age 65 and over had a net worth of $319,200, compared to the same-age renter whose net worth was just $6,700. Further, owners who have paid off their mortgage have lower housing costs, at a monthly median housing of $458, compared to renters’ monthly cost of $830.
The report highlights growing affordability challenges facing the nation with respect to housing its increasing older adult population.
“Addressing these issues will require concerted action at all levels of government,” said Jennifer Molinksky, a senior research associate at the Harvard Joint Center and lead author of the report. “This is especially true as the leading edge of the baby boomers reaches their 80s in the next decade and the need for affordable and accessible housing increases.”
View the full report