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Analysts at the Joint Center for Housing Studies at Harvard University foresee a promising uptick in the construction of single-family housing over the next year -- a sure sign that the housing market is heading toward recovery. But the center also predicts an increase in the number of older homeowners and renters who feel burdened by high housing costs.
The center’s new State of the Nation’s Housing report suggests that these growing cost burdens will increase the need for assisted housing and supportive services among the nation’s older adults.
The number of U.S. households paying more than half of their incomes for housing rose by 2.3 million between 2007 and 2010, according to the report. Renters accounted for most of that increase. But the number of severely cost-burdened home owners also rose by more than 350,000. Many of those households found themselves unable to refinance expensive mortgages.
Increases in the number of older Americans caused the number of cost-burdened older homeowners to increase by a third between 2001 (3.1 million) and 2010 (4.1 million). Almost one-fifth (16%) of older homeowners are now considered to be cost-burdened. That percentage is expected to increase as more baby boomers enter old age over the next 20 years.
The aging of the baby boom generation is also expected to make it harder for older homeowners to buy and sell their homes or to move.
Mobility rates generally drop sharply with age, according to the report. This makes adults over the age of 65 almost 8 times less likely to move in a given year than younger people in their 20s.
The recession caused mobility rates to fall even more than usual during the past few years. Only 1.9% of owner-occupants who were aged 65-74 in 2011 had changed residences during the previous year. This represents a decline from about 3.3% in 2007. Mobility rates for homeowners aged 75 and over also fell during the same period. Those rates changed from 1.9% in 2007 to 1.6% in 2011.
Declining mobility rates mean that the vast majority of baby boomers are likely to age in place, say the Harvard analysts. As a result, they predict, the aging of the baby boom generation will lift the percentage of older owner-occupied households to a record high.