Don’t look now, but it’s getting harder for older Americans to hold on to a key piece of the American dream.
Homeownership patterns are shifting for Americans over age 55, even as the senior population grows. Particularly among those age 55 to 64, renting is becoming more common, and that trend is likely to continue, according to Rolf Pendall, director of the Metropolitan Housing and Communities Policy Center at the Urban Institute.
Pendall and his colleagues have observed a decline in the share of 55- to 64-year-olds owning homes since 1990, which accelerated between 2010 and 2013 in the wake of the financial crisis. He and his colleagues forecast a roughly 10-percentage-point decline in the rate of homeownership for this age group between 1990 and 2030.
In addition, Pendall and his colleagues see the overall number of seniors rising, and the number of senior homeowners increasing as well, from 20 million in 2010 to 33.7 million in 2030. But the growth in the number of renters will outpace the growth in homeowners, rising from 5.8 million to 12.2 million.
Both shifts, Pendall said, bring potential risks.
“For a senior, having a house is much better than not having your own house,” provided the home is both affordable and in decent shape for a senior’s lifestyle and limitations, he said. “Not having that control over your unit is an existential threat.”
Demographic changes are a major reason Pendall and others see rapid growth in the number of older renters. For one thing, there are tighter credit standards for mortgages, which have persisted since the financial crisis.
“If you start out as a 44-year-old and you don’t have a house, it would be very difficult for you to achieve homeownership in the next 10 years with the same probability as was true 10 years ago,” he said.
In addition, America is becoming increasingly ethnically diverse, and homeownership rates historically have been lower for Hispanics and African Americans.
In the fourth quarter of 2015, the homeownership rate for non-Hispanic whites was 72.2 percent, while for Hispanics it was 46.7 percent and just 41.9 percent for African Americans, according to Census Bureau data.
Income is a key factor in those different rates: White Americans’ real median income in 2014 was $60,256, well above Hispanics’ at $42,492 and African Americans’ at $35,398, according to 2015 Current Population Survey data.