September 22nd, 2014
Many baby boomers are reaching retirement age, and some are expected to have trouble finding suitable housing as they get older.
A recent study by the Joint Center for Housing Studies of Harvard University determined accessibility and affordability are among the challenges to face aging Americans as they seek housing in retirement. These obstacles will be present for many consumers, as the report noted the 50-and-older population is forecasted to grow to 132 million by 2030, representing a 20 percent increase. Additionally, one in five people are anticipated to be 65 or older.
Among older individuals, one housing goal remains consistent: a setting that facilitates independent living. To achieve this objective, senior housing requires the presence of several factors:
Rising home prices constrain affordability
Home prices have been going up steadily throughout the housing recovery, though they have been increasing at a slower pace in recent months. CoreLogic recently reported home prices went up 7.4 percent year over year and 1.2 percent month over month in July. Sam Khater, deputy chief economist for CoreLogic, said it is clear home prices are moderating. However, price appreciation is reaching levels seen before the recession in many states. While this is good news for the housing market, the gains have priced some consumers out of the market.
“Today, a third of adults aged 50 and over – including 37 percent of those aged 80 and over – pay more than 30 percent of income for housing that may or may not fit their needs,” the JCHS report read. “Among those aged 65 and over, about half of all renters and owners still paying off mortgages are similarly housing cost burdened.”
Few homes have accessible designs
These expensive housing costs could be exacerbated by the need to install features related to accessibility. The study said there are five main features that are needed for accessibility: single-floor living, no-step entryways, accessible electrical controls and switches, lever-style door and faucet handles, and extra wide doorways and hallways. Citing data from the 2011 American Housing Survey, the researchers noted only 1 percent of homes in the U.S. have all five features. Older homebuyers with disabilities must move to a location where more properties meet their needs or renovate.
“Because of regional differences in housing stocks, homeowners in certain areas may have to make major modifications to enable a household member with disabilities to remain at home,” the report read. “For example, many homes in the Northeast are built on multiple levels and fail to provide a bedroom and bathroom on the first floor, while nearly 84 percent of homes in the South provide single-floor living.”
The one positive of the additional costs to make the modifications is that they are typically more affordable than extended stays at nursing home and assisted living facilities.
The nation needs to prepare
The report suggested that more suitable homes need to be built to accommodate the growing number of retiring baby boomers. Furthermore, individuals who are nearing retirement were advised to plan ahead with the knowledge that independent living has the aforementioned challenges.