The growing trend of “aging in place” is reshaping the U.S. housing market, driven by economic constraints and demographic shifts. While remaining in their homes offers a sense of stability and independence for retirees, this choice is exacerbating housing shortages and contributing to financial inequalities between generations.
The Roots of the Problem
For many retirees, staying in their current homes is not just a preference but a necessity. Skyrocketing home prices, high mortgage interest rates, and limited housing inventory have made downsizing or relocating financially untenable.
According to a recent Redfin study, 78% of baby boomers plan to remain in their current homes during retirement. These homes, often large with three or more bedrooms, comprise 28.2% of the nation’s housing inventory, yet many are ill-suited for aging adults due to accessibility challenges.
“Baby Boomers are increasingly choosing to ‘age in place,’” New York City real estate broker Alexandra Gupta told Newsweek. “This trend is contributing directly to the housing shortage, as millions of homes that would otherwise be available to younger buyers remain occupied.”
The Challenges of Aging in Place
Many homes owned by retirees lack accessibility features such as ramps, elevators, and zero-entry showers. Adding these modifications is costly, especially for those on fixed incomes. A 2023 CNBC report revealed that less than 5% of U.S. homes are accessible, leaving few affordable alternatives for aging homeowners.
Ralph DiBugnara, founder of Home Qualified, explains: “Baby Boomers are equity-rich but cash-poor. They want to move or downsize but can’t afford to, due to high interest rates and home prices. This keeps them locked in their current homes, worsening the inventory shortage.”
Moreover, these modifications may decrease a property’s appeal to younger buyers. A 2021 survey by the National Association of Home Builders found that 56% of prospective buyers would avoid purchasing a home with an elevator, highlighting the disconnect between retirees’ needs and market demand.
The Ripple Effect on Younger Generations
This trend has created broader economic consequences. Millennials and Gen Z, already burdened by high home prices and student debt, face additional hurdles as the housing supply dwindles. As homeownership remains elusive, many younger individuals are turning to rentals, driving up demand—and rents—in metropolitan areas.
Gupta notes, “Boomers’ control over a large share of the housing market has created a wealth gap. Their ability to leverage home equity for financial security contrasts with younger generations’ struggle to build wealth through homeownership.”
Searching for Solutions
Addressing this growing crisis will require systemic change. Jesse Saginor, a professor of real estate development at the University of Maryland, suggests a multipronged approach:
- Increase Affordable Housing: Expanding subsidies, tax credits, and zoning flexibility to construct affordable senior housing can help retirees transition to more suitable accommodations.
- Broader Development Efforts: “Until we build for all segments of the population in terms of income and age, shortages will persist,” says Saginor.
Investing in accessible and affordable housing options could unlock the housing market, freeing up larger homes for younger families while ensuring that seniors can live comfortably and independently.
The challenge, however, is significant. Without concerted efforts from policymakers, developers, and communities, the divide between generations will continue to widen, leaving both retirees and aspiring homeowners with few viable options.
