66% of U.S. adults aged 55 and older expect to age in place, and in the past five years, the cohort has made notable financial gains. However, the accelerating trend of older adults choosing to age in place could contribute to housing shortages seen across the country, since homes that older people will stay in for longer periods will be unavailable for those seeking to become homeowners.
This is according to a new research brief by the Federal Home Loan Mortgage Corporation (FHLMC, or “Freddie Mac”) released this week.
“In two surveys, the first in 2016 and again in 2021, Freddie Mac sought to track the attitudes and perceptions of U.S. adults age 55 years and older in several key areas, including mobility in the housing market,” the research brief reads.
These are important trends to track for two reasons: the first is that members of the baby boomer generation hold the majority of the housing wealth in the U.S., and the second is that the past two years have seen the housing supply fall to record lows, the brief says.
Compared with the 2016 surveys, older adults feel more confident in their financial situation and their accompanying ability to live comfortably in retirement, rising to 72% in 2021 from 66% in 2016. Homeowners feel more confident in this than renters by a wide margin, 79% to 38%. Renters recorded no change in their own sentiments on this issue between 2016 and 2021.
Those recorded financial gains affect the choice to age in place.
“Today, 66% of [the 55-plus] population report that they plan to age in place,” the brief reads. “Little changed from 2016, when 63% said the same. Given their reported financial gains in the past five years, however, they may be more equipped to do so.”
Additionally, 66% of respondents also report that they expect some need for home renovation or modification to more readily accommodate their needs in later life. However, when it comes to the ability to build wealth in the U.S., it’s hard to beat the prospects that accompany homeownership, the brief explains.
“This divide between renters and homeowners in this population underscores the long-term value of homeownership, as homeowners are significantly more likely than renters to feel more financially comfortable, confident they can retire comfortably, have long-term care paid for, transfer wealth to family, and live comfortably in their current homes into retirement,” the brief explains.
Read the research brief at Freddie Mac.