a peter pan phenomenon?

Older Americans Face Challenges When Aging in Place

Retrofitting a Potential But Out-of-Reach Solution for Many

MCLEAN, VA, February 27, 2017 /Marketwired/ — Freddie Mac (OTCQB: FMCC) released today its Insight for February, which outlines challenges, costs and potential solutions of addressing the desire of older Americans to age in place.

Survey data shows half of all 55+ Americans and three quarters of 75+ Americans are impacted by at least one physical functional limitation, heightening the growing demand for retrofitting.

Insight Highlights

The Freddie Mac survey of the 55+ population indicates almost two-thirds of homeowners — 43 million people — wish to age in place.

Two-thirds of survey participants report their homes are not accessible for someone with arthritis, limited mobility, or in a wheelchair.

About 1.5 million older households today need some retrofitting, and that number rises to 2.0 million per year by 2030.
If a major retrofit is required, it can be 40 times more expensive than a simple retrofit such as adding some grab bars and new drawer handles.

Retrofitting may be too expensive for many of those who wish to age in place.

Excerpts from the Freddie Mac ‘Fun at Fifty’ study

According to the common wisdom, Baby Boomers — like Peter Pan — refuse to grow older. Instead of retiring, they launch second — and third — careers. Instead of moving to seniors-oriented communities, they “age-in-place” or, even better, move into the heart of a walkable city. Human interest stories in the Sunday papers claim that 70 is the new 40 and 60 still has bad skin and trouble talking to girls. These clichés make great copy, but how accurate are they? In place of rigorous research, I offer one personal observation.

Nearly a quarter of all Baby Boomers are going to be faced with the financial realities of aging in place, which can range from a few hundred to thousands of dollars.

In grade school, I played trombone in the school band. At Christmas, the trumpets, trombones, and sousaphones formed a brass choir and performed Christmas carols at schools and senior centers. I vividly remember performing for the Fun After Fifty club, a popular social group for seniors. Yes, “after fifty,” you were officially a senior, but you were still allowed to have “fun.”

Now that I am (slightly) north of 55, I decided to check the current status of the Fun After Fifty clubs. The Fun After Fifty Wikispace has been deactivated—it has been inactive for an extended period of time. The Fun After Fifty chapter in my hometown still has an active web site, but a post from last October says “It looks like the club is dying for lack of people willing to serve.” It seems like you have to be a lot older these days to be a senior citizen.

The importance of the 55+ population

Individuals older than 54 comprise a little over a quarter of the population (Exhibit 1) of the U.S., but they control roughly two-thirds of the equity in single-family homes. And, for most of these households, their home is their largest asset. Many of the 55+ purchased homes during a sustained boom in house prices, notwithstanding the house price roller coaster of the last ten years. Today’s 65-year-old who bought the “average” house at age 30 has seen the value of that house increase 3.7 times. Assuming a 20 percent down payment, a reasonable number of refinances to take advantage of declining mortgage rates, and the impact of the mortgage interest tax deduction, the rate of return on this investment is hard to beat. For many older folks, these literally are the golden years.

Their numbers and their housing wealth guarantee that the housing decisions of older homeowners will play an outsized role in shaping the housing opportunities available to the generations that follow them — Gen X and the massive Millennial generation. And the influence of the 55+ population will last a long time (Exhibit 2). Today’s 65-year-old can expect to live until age 84 on average. In contrast, the life expectancy of the Greatest Generation — those born between 1900 and 1924 — was 47 years. 1 With a longer life span and ample wealth, many older homeowners may buy and sell several more homes before they’re done.

Who are the 55+?

First, the 55+ population is noticeably less diverse than younger generations (Exhibit 3), reflecting the relatively-slower growth of the white, non-Hispanic population compared to other demographic groups in recent years.

Older Americans are staying in the labor force longer than they used to (Exhibit 4). After bottoming out in the mid-1990s, the labor force participation rate of the 55+ population has been increasing. Two factors may contribute to this increase in labor force participation. First, older Americans are staying healthy longer. In addition, some of the 55+ are working longer to provide adequately for their longer life expectancy.

Older Americans are far likelier to have married than those under 55 (Exhibit 5). Fully 42 percent of the population under 55 has never married, while only eight percent of the 55+ population has never married.
Not surprisingly, over half of 55+ homeowners have lived in the same residence for ten or more years (Exhibit 6), while only a quarter of the population under 55 has lived in the same place this long.

Quote attributed to Sean Becketti, Vice President and Chief Economist

“Nearly a quarter of all Baby Boomers are going to be faced with the financial realities of aging in place, which can range from a few hundred to thousands of dollars. Of course, the cost depends on the type and condition of the home. Many older homes, such as many of the colonial-style homes common in the Northeast and Midwest, may not be good candidates for retrofitting. For some of them, aging in place until the bitter end may not even be a possibility. Like Betty Davis said, ‘Old age is not for sissies.'”




Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more here, on Twitter @FreddieMac and Freddie Mac’s blog.