The Baby Boomer generation comprises 23% of the population and heads up 36% of its households. By 2035, the oldest Boomers will be on the verge of 90 years old. Their aging will result in a big increase in the older adult population and the number of these households. Along with that increase will come large increases in the number of older adult households who are generally low or extremely low income; have members with limited mobility or cognitive challenges; require at-home medical services; and/or have higher sensitivity and lower adaptive capacity when it comes to climate events. At the same time, older homeowners in particular will have an outsized influence on the housing market based on whether and where they decide to move in their later years.
The cost of housing is a fundamental challenge for older adults, since most see their income decline over time. Median income for over-65 households in Massachusetts is $63,000, half of the median income for householders 45-64. Even those that own their own home may have challenges making ends meet, despite the real estate value of their property. University of Massachusetts researchers estimated in 2022 that more than half of Massachusetts’ older adults living alone, and one quarter of older couples, lack the financial resources required to pay for basic needs. Massachusetts ranks last out all of 50 states in economic security for older adults, with higher housing costs being the main driver. Though perhaps worse in Massachusetts, the rate of older adults experiencing homelessness has been rising substantially at a national level.
About 68.7% of householders 65 and older in Massachusetts own their own home, and many have owned it for some time. According to the 2023 American Community Survey, 62% of 65+ homeowners moved in before Y2K. Over that time, median home values have increased by 74%. As home prices have steadily rose, many if not most of these homeowners have accumulated substantial wealth in the form of home equity, putting them in a more advantageous position than renters. A Joint Center for Housing Studies report found that homeowners have more wealth than renters in both home equity and non-housing assets. This wealth can help older adult homeowners navigate many challenges. The same Joint Center report found that the typical homeowner aged 65 and over has enough wealth to pay for 42 months of nursing home care and enough non-housing wealth to cover 15 months of care. The report continues, “the median older renter, in contrast, cannot afford even one month in a nursing home. Indeed, only 18 percent of renters could pay for nursing home care for more than a year.”
Renters are much more vulnerable to unexpected housing cost increases and have less resources to pay for home care. Housing instability among older adults can lead to premature nursing home admissions, ultimately driving up the cost of care and often resulting worse outcomes for well-being. State funding has long prioritized access to community living for older adults, resulting in a 5.4% decline in utilization of nursing home resulting in an increase in nursing facility closures. These trends may change with increases in the number of older adult households, which may create challenges given recent findings showing that nursing facilities across the state are operating near full capacity as a result of system-wide staffing shortages.