Although the idea of “aging in place” appears to be gaining traction as a reaction to loneliness and the overindulgent culture of consumerism, the truth is that many retirees may be forced to remain in a home that does not suit their requirements.
The issue appears to be twofold: first, buying a home is very costly due to high interest rates and a shortage of inventory; second, the majority of baby boomers own a significant share of the market, and their homes are large and out of reach for the young families they were intended to serve.
According to a recent Redfin survey, 78% of baby boomers want to retire in their existing residences. Furthermore, according to a Redfin estimate from 2022, empty-nest boomers own 28.2% of all “large homes,” residences with three or more bedrooms. However, just 14.2% of such residences are owned by millennials, who are likelier to have children at home.
In many places, the days of elders downsizing and clearing out family homes are a thing of the past due to financial constraints, and the effects are only now becoming apparent.
“Baby Boomers are increasingly choosing to ‘age in place,’ meaning they stay in their homes longer rather than selling to downsize or relocate,” New York City real estate broker Alexandra Gupta told Newsweek. Because millions of properties that might otherwise be accessible to younger purchasers are still inhabited, this pattern directly contributes to the housing crisis.
However, these residences were not always seen as an antiquated remedy. Renovating bathrooms to enable zero-entry showers and retrofitting accessible objects like elevators or ramps are costly projects that people on fixed incomes cannot readily afford. If downsizing is difficult, it is nearly impossible in an accessible house since, according to a 2023 CNBC article, fewer than 5% of the housing stock in the United States is accessible.
The Reasons for Retirees’ Inaction:
Home Qualified’s founder and president, Ralph DiBugnara, summarizes the problem. “The most significant issue I observe with homeowners today is that, due to high mortgage rates and property values, they are cash-poor, equity-wealthy, and have few alternatives for fixing their situation. Baby boomers want to downsize or relocate at this point in their lives, but many cannot due to a shortage of available houses, which has increased costs. They are being kept in homes with equity because of this and the high price of a new house because of rising interest rates and insurance premiums. This also plays a significant role in the market’s inventory shortage issue.
Therefore, retrofitting accessible adaptations such as ramps, larger hallways, elevators, and other mobility aids remains possible. These changes are not only an additional price but also appear to devalue a house for young, prospective purchasers who do not require these accommodations.
Fifty-six percent of respondents to a 2021 National Association of Home Builders study on homebuyer attitudes stated that they would not purchase a house if it included an elevator, essential for wheelchair users residing in multi-story buildings. Most respondents thought additional changes like large halls and step-free entrances were desirable, although they may raise costs.
According to Gupta, “Boomers’ control over a large share of the housing market also has a broader economic effect,” indicating that the impact of this trend is extremely real and felt by many. Many Boomers have significant home equity, enabling them to secure retirement or leverage their property for wealth. Younger generations, however, may struggle to create equivalent wealth through homeownership. The wealth gap between Boomers and later generations may deepen as real estate continues to be out of reach for younger buyers, with homeownership emerging as a key factor in financial inequality.
Senior-friendly housing may become increasingly in demand in the rental market as more Boomers age in place or decide to downsize into more accessible housing alternatives. Renting for extended periods may become more common among Millennials and Gen Z, who are already delaying purchases because of growing costs. As younger people put off buying houses, accumulating money for down payments may become more complex, resulting in higher rents, particularly in coveted urban locations.
What are Some Remedies?
Jesse Saginor, associate professor of real estate development at the University of Maryland School of Architecture and Preservation, suggests a few remedies. Still, they will require a concentrated effort and be brutal.
Given that many seniors may only live on Social Security and nothing else, one way to help them find somewhere reasonable to move to is to boost significantly financing, subsidies, tax credits, and/or zoning flexibility to build affordable senior housing. Therefore, that approach focuses on creating inexpensive and reachable homes for seniors willing to relocate. Considering their limited wages, it eliminates the barrier to housing.
However, Saginor went on to say that “there will always be shortages, regardless of mortgage rates and inflation, until we build for all segments of the population in terms of income and age, because the supply of housing is largely static while the demand for housing tends to be dynamic.”
