The aging baby boomer population is something that is expected to affect both single family and multifamily housing markets, David Brickman, EVP of multifamily business at Freddie Mac explains in an executive perspective post.
Brickman highlights that as the population ages, there will be a massive need for housing that offers affordability, accessibility, support services, and community over the next 10 to 20 years. He adds that preparation must begin now in order for consumers to take advantage of the opportunities that will arise.
The post noted that nearly one-quarter of the U.S. population will be age 50 or older by 2030, nearly 39 million adults will be between 65 and 74 years, and by 2035, the number of households aged 80 or older will have doubled since 2010.
Senior households have been rising slowly over the decades, but this is about to change in the coming years. Urban Institute’s analysis of housing trends determined that senior households are expected to grow dramatically by 2030 released in June 2015.
The Institute found in 1990, there were 20 million households for seniors ages 65 and up. In 2010, this number had reached 25.8 million, and by 2030, the institute projects that aging baby boomer households will reach 46 million.
“This dramatic growth will occur among both senior homeowners and renters, the authors said. “Our research suggests that from 2010 to 2030, senior homeowners will increase from 20 million to almost 34 million, and senior renters—who include both homeowners who will shift to renting and baby boomers who already rent—will increase from 5.8 million to 12.2 million.”
A recent report titled "The State of the Nation's Housing 2015" from the Joint Center for Housing Studies of Harvard University (JCHS) released in June, examined the older population group and identified factors that will affect housing markets:
- Preferences for homeownership have been shifting. One-quarter of renter households in 2014 were aged 55 and older–but this cohort accounted for 42 percent of renter growth over the last decade.
- More adults are putting off retirement. But in time, they lose earning power. An additional 10 million adults 65 or older will be considered low-income in the next 10 years.
- This will magnify an already-worrisome fact: One-third of Baby Boomers–20 million–were "cost-burdened" in 2012, spending more than 30 percent of their income on housing. For half of them, housing consumed half of their income.
"Being properly housed and cared for is vital to overall well-being, but can be harder to achieve as we age," Brickman said. "More needs to be done to make it possible–the urgency will only grow in coming years. Something else to remember: Within the next 20 years, millennials will start moving into their 50s."