Several recent surveys have found that Americans prefer to age in place, but that may also come with some trade-offs. A new study by the Urban Institute tracks some of the ways to help seniors age in place.
The Urban Institute states that according to the 2017 American Community Survey, more than 40% of seniors (ages 55-75) and 38% of seniors older than 75 live in a three-bedroom house, which is a possible mismatch between the size/maintenance requirements for the home and the needs of the senior.
Instead, the report states people should value certain aspects of a home, such as affordability, access to medical facilities, social programs, local transportation, and proximity to family and friends.
Another issue to consider is that many seniors do not have enough savings to pay for their living expenses in retirement, and more seniors are relying on mortgages. The report states that 41% of senior homeowners older than 65 have a mortgage, compared to just 21% in 1989. Mortgage balances are also higher, increasing to $72,000 from $17,000 during that same period of time for that same age group.
Research has found that 3 million American older than 65 are treated annually for falls, requiring 800,000 hospitalizations. The hospitalization costs about $33,000 per stay, and a total annual cost of $55 billion.
The report states in-home modifications reduce falls by 50% for seniors over the age of 75, and every $1 invested in modifications returns $1.50 in reduced medical spending.
While there are options to monetize home equity to improve retirement finances, the lack of mechanisms are a barrier. The Urban Institute states that high costs, product complexity, fear of losing their homes or getting scammed are reason they don’t participate in the HECM program.
The Department of Housing and Urban Development made several changes to the HECM to reduce risk, but they have shrunk the pool of potential borrowers.
A report last month by the National Association of Home Builders (NAHB) found that 53 of buyers in Q1 2019 were actively seeking a home. Seniors were the group the NAHB found most likely to be seeking a home at 56%.
Millennials come in at 50% and baby boomers were the lowest share at 41%.