Wealth Inequality and Housing Cost-Burdened Households Increase Among Older Adults

The Joint Center for Housing Studies at Harvard University released “Housing America’s Older Adults 2019,” a supplement to its State of the Nation’s Housing 2019 report. The supplement describes the growing population of U.S. households headed by someone at least 65 years old and identifies some of unique challenges faced by older low-income households. Among the authors’ key findings are that income and wealth inequality is increasing among older households and the number of housing cost-burdened older households has grown.

The number and share of U.S. households age 65 and over have increased in recent years. The number of such households increased by 4 million between 2012 and 2017. Older households made up 26% of all households in 2018 and are projected to make up 34% in 2038. Racial diversity and multigenerational living are increasing among this age group.

The report notes that income inequality among older households is increasing. Among households aged 50–64, the median income for the highest earners set a new record in 2017 (nearly $204,000), while the median income for the lowest earners was below its level in 2000 ($14,400). A similar pattern holds for those at least 65 years old: the median income for the highest earners rose 22% between 2012 and 2017, while the median income of the lowest earners fell 4%.

Homeownership plays a significant role in exacerbating the wealth gap among older US households, regardless of income level. Of households age 65 or older, 78.5% owned their primary residence in 2018. Homeowners generally have considerably greater net wealth: in 2016, the median homeowner at least 65 years old had a net wealth of $319,000, whereas the median same-age renter had a net wealth of $6,700. White households are likelier to own their own homes than black, Hispanic, or Asian households. In 2018, the black-white homeownership gap reached a 30-year high of 19.4 percentage points.

While the share of housing cost-burdened households (those spending more than 30% of their incomes on their housing) has remained essentially flat among households age 65 and over, the number of cost-burdened households in this age group has climbed to a new high of nearly 10 million. As the number of cost-burdened older adults rises, the older homeless population also climbs. Between 2007 and 2017, the share of homeless individuals age 50 and over jumped from 22.9% to 33.8%.

The authors also identify some housing needs particular to this older group. They note that nearly a third of households age 65 and over in 2017 lived in low-density communities, where residents typically need to be able to drive and where there are fewer transportation options for healthcare workers and service providers. The authors also note that older households are more likely to need accessibility features, like handrails and extra-wide doors, which are available in just 3.5% of all U.S. homes. Low-income renters may struggle to afford to install such improvements themselves.

The full report can be found at: https://bit.ly/2MM23WR