Senior Homeowners: Aging in Place or Just Stuck?

When it came to housing, Susan Apel and Keith Irwin thought they had planned adroitly for their retirement. 24 years ago, the couple bought a four-bedroom house on two acres in Lebanon, New Hampshire. They made sure to pay off the mortgage before retiring so that they could downsize into smaller quarters when necessary, using the home equity built up. 
 
That time has now arrived. Apel, a retired law professor at age 71, finds climbing stairs challenging, while Irwin, also aged 71 and formerly an account manager, is tired of yard work and snow shoveling. The difficulties of finding workers for these chores have further amplified their need to move. 
 
"We're seeing the writing on the wall," said Apel as she spoke about shopping for "a nice two-bedroom condo with a little den all on one floor." However, local developers seem interested only in building four-level townhouses with more stairs than their current home. 
 
The few suitable single-story homes are instantly purchased by city dwellers fleeing the COVID-19 pandemic consequences, which have inflated housing prices significantly. A unit needing refurbishment was listed at $950k, while even tiny apartments are sold for around $600k. 
 
Apel expressed dismay over this trend, stating how grateful they were for having paid off their house but never anticipating that it would hinder them from moving out when needed. 
 
Approximately 80% of older adults live in homes they own, according to economists who suggest rethinking traditional notions that fully paid-off houses can serve as ATMs funding retirement living costs since homeownership might not be an unqualified benefit anymore, especially among seniors who may feel stuck rather than aging comfortably in place. 
 
Data from the Harvard Joint Center for Housing Studies reveals increasing proportions of older adults carrying mortgage debt over recent decades—nearly doubling between 1989 (24%) and 2022 (41%). This situation, coupled with higher interest rates and rising property taxes, insurance premiums, maintenance expenditures, etc., has rendered 43% of older homeowners "cost burdened," as they spend more than 30% of their income on housing-related costs. 
 
Despite these challenges, the median home equity has also risen by $80k over three years to reach $250k in 2022. This surge is why Boston College's Center for Retirement Research recently lowered its estimate of households at risk of not maintaining their post-retirement standard of living from a concerning 47% in 2019 to a still unnerving but lower figure of 39%. 
 
However, only a small fraction actually taps into this home equity due to the perceived complexities and high upfront costs associated with reverse mortgages or other methods. Furthermore, many are reluctant about depleting this nest egg intended for emergencies or inheritance, leaving them stuck even when they wish to move on, especially amid rising maintenance costs and a dearth of suitable, affordable homes for seniors. 
 
Minority homeowners face greater struggles as most wealth tied up in houses leaves fewer liquid assets available because lifetime earnings tend to be lower, which results in widening inequality, according to Anthony Webb, a senior fellow at the New School for Social Research. 
 
Experts suggest that policymakers could mitigate these issues through measures like improving and streamlining the federal HECM program, broadening criteria for refinancing loans, encouraging the development of elder-friendly housing, etc. Despite current challenges, homeownership remains beneficial overall, providing protection against soaring living costs and potential funding sources for long-term care, among others. 
 
Meanwhile, Apel and Irwin continue their frustrating search, unwilling yet unable to leave the community where they've lived happily all these decades, despite their readiness to give up an ideally suited family life, underscoring the real-world implications of the of the evolving American dream around homeownership and retirement planning.