- New home owners have benefited from rising home prices amid a housing shortage.
- But now they are facing a shortage of accessible retirement homes.
- Many seniors are stuck in homes where they are increasingly struggling to live and pay.
Baby boomers have been the big winners in the US housing market, but as the generation retires, its members are facing a new challenge in finding affordable housing.
It’s a problem they had a hand in creating.
Generation homeowners — now ages 59 to 78 — have seen their home equity grow, especially over the past decade, as a growing housing shortage across the U.S. has pushed home prices up sky.
But as the generation approaches its 80s, young people are beginning to suffer from their own housing problems: a severe shortage of accessible and affordable retirement homes. The housing issue is compounded by rising health care and elder care costs.
With mortgage rates and housing costs high and inventory scarce, many seniors are staying put. Almost 80% of baby boomers recently surveyed by Redfin said they were planning to grow old in their current home. And as of 2022, empty-nester boomers owned twice as many homes with three or more bedrooms than millennials with children. While some manufacturers simply don’t want to downsize or move, others can’t afford it or don’t have any viable options.
“Is it aging in place, or stuck in place?” said Jennifer Molinsky, director of the Aging Society Housing Program at Harvard University. “There are a lot of people in between, including homeowners, who are stuck.”
Molinsky wrote a report last year that found the US did not have enough housing and care services for aging adults.
Homeowners who oppose new, denser housing in their neighborhoods are a major reason many American communities are homeless. Those opposed to the construction are disproportionately older homeowners. While boomers didn’t create many of these not-in-my-backyard laws restricting housing construction, in many cases, they have championed such regulations, dominating attendance at community board meetings and fighting housing projects.
Boomers are struggling to find accessible and affordable homes amid rising costs
As people age, they tend to need more accessible homes with fewer stairs and wider hallways. As they stop driving, many also want to live in places more walkable or transit-friendly to access amenities and combat isolation.
But restrictive land-use laws, including those that prohibit apartment buildings in single-family home zones, have made affordable housing options harder to find in many of the communities boomers have called home. for decades. The Harvard report found that less than 4% of US homes had the three factors needed for those with limited mobility: a single story; wide corridors and doors; and no steps to enter.
“There’s just such a variety of families that we’re not serving with the traditional single-family home,” Molinsky said.
Many older homeowners — especially the growing number who still have mortgages — are struggling with rising insurance premiums. Nationally, home insurance premiums rose by an average of 21% from May 2022 to May 2023, Genius of politicsa insurance market, found. Insurance companies are increasingly shedding customers and pulling out of entire regions, especially those hardest hit by climate-related disasters.
The Harvard report noted that places where retirees have flocked in recent decades, such as South Florida and Arizona, also faced some of the worst climate-related impacts, including regular floods, wildfires and extreme heat.
A record number of homeowners 65 and older are cost-burdened, meaning they spend more than 30% of their income on housing and utilities, the report said. This is especially difficult for those on fixed incomes. As a result, the elderly are increasingly facing homelessness. Single adults 50 and older they are now estimated to make up about half of the US homeless population, up from about 10% three decades ago.
Not all boomers have benefited from rising housing prices and home equity. Wealth among boomers is very unevenly distributed, including when it comes to housing. Older renters and black homeowners tend to have much higher housing costs. Molinsky’s report found that older black homeowners had less than half the home equity of older white homeowners.
Molinsky said the lack of housing suitable for aging would hurt low- and moderate-income people and people of color the most.
“All of these things become much more pressing over the next few years when the baby boomers turn 80,” Molinsky said. “There really is no time to waste.”
Are you struggling to downsize or find a suitable retirement home? Are you affected differently by the cost of retirement housing? Contact this reporter at erelman@businessinsider.com.