State of the Nation's Housing Report Released
Regulation | November 19, 2020 | by Linda Couch
The Joint Center for Housing Studies of Harvard University’s State of the Nation’s Housing 2020, paints a distressing portrait of housing affordability in the United States for households with low incomes, including older adult households.
The Joint Center for Housing Studies of Harvard University’s State of the Nation’s Housing 2020, paints a distressing portrait of housing affordability in the United States for households with low incomes, including older adult households. Growing income inequality, the ravages of COVID-19 on household income, the racial inequities resulting from decades of bad lending and housing policies, and a year, so far, with 16 billion-dollar natural disasters, has made 2020 excruciatingly difficult for households with low incomes.
According to the report, released November 19, “The nation’s youngest and oldest households are the most likely to be [housing] cost burdened.” Across housing tenures, the report says, “The shares with burdens decline for each successive age group through ages 45–54, but rise thereafter. Cost-burden rates are especially high among those age 85 and over. Indeed, households in that age group had the second-highest cost-burdened share in 2019, with 1.5 million of the 4.0 million households in this age range (36.8 percent) paying more than a third of their incomes for housing.”
Of the nation's 33 million older adult households, about 15%, or more than five million, are severely cost burdened, spending more than half of their income for housing. For all owner households 65+, 11% spend more than half of their incomes for housing (i.e., they are severely cost burdened). For all renter households 65+, 30% are severely cost burdened. The lower the income of the houeshold, the more likely they are to be housing cost burdened.
Owning a home does not keep cost burdens at bay for older adults. An increasing share of older adults have mortgage debt, and the value of mortgage debt held by older adults has risen rapidly, resulting in cost burdens. “For older homeowners more generally, having mortgage debt can make the difference between being cost burdened and not. The share of homeowners with housing debt at age 65 and over more than doubled from 1989 to 2019, while the median loan-to-value ratio on that debt nearly tripled to 36.8 percent. By 2019, 40.2 percent of older homeowners with mortgages (3.8 million) were cost burdened, compared with only 14.7 percent (2.4 million) of same-age owners without mortgages,” according to the report.
The report also provides evidence for the adage, “the rent eats first.” Older adults with moderate cost burdens spent 31% less on healthcare and 21% less on food than same-age households without burdens, while those with severe burdens spent nearly 50% less on both healthcare and food,” the report says.
Find the report here.