Mortgage No More: Baby Boomers Who Rent Are On the Rise
In the past decade, there was a 43 percent increase in renters over the age of 60. The trend brings with it new challenges -- and benefits -- for cities.
- From 2007 to 2017, there was a 43 percent increase in renters over the age of 60.
- The share of older renters is growing the fastest in Austin, Texas.
- This trend could impact cities' development and economy.
As baby boomers age, more and more of them are choosing to rent instead of own their homes. It's led to a rise in the average age of renters and in renters overall.
From 2007 to 2017, there was a 43 percent increase in renters over the age of 60, according to a new report from Rent Cafe, a nationwide apartment listing service. As a result, the median age of renters ticked up from 36.7 years old to 38.1. Meanwhile, renting is near a 50-year high, with 36.6 percent of Americans doing it, according to the Pew Research Center.
The causes behind the rise in older renters are both demographic and economic, explains Mark Trekson, research associate for the Metropolitan Housing and Communities Policy Center at the Urban Institute.
Many senior renters, he says, are baby boomers who never purchased a home. Others are people who lost their homes in the Great Recession and have not bought again. The economic downturn also impacted seniors' retirement decisions. “There was a downward shift in mobility after the Great Recession,” Trekson says. As older workers aged out of the workforce, they were more likely to stay in their rental homes because the economic downturn ate away at their savings and nest eggs.
For those who could move, larger cities are proving to be attractive.
“As people get older, their needs change,” Trekson says. “If you are in a split-level home or a multi-level house, you might want to move to a place with an elevator and amenities in walking distance.”
The share of older renters grew the most in Austin, Texas, where it more than doubled. Other big cities that showed significant gains in older renters include San Francisco, where 24 percent of renters are now over 60; New York, where the share is more than one in four; and Washington, D.C., where it's one in five. Each of those three cities has seen at least a 20 percent increase in older renters over the past decade.
Many seniors, however, are still clustered in traditional retirement areas, such as Arizona, California -- and Florida, which is home to 12 of the country's top cities for older renters.
The rental shift could have a noticeable impact on cities.
Older renters may have additional needs that their younger counterparts don’t require, such as increased health-care services and better building access. Developers have begun to think about how to accommodate both young and older renters, upgrading and retrofitting buildings to make them more accessible.
There are financial and economic benefits of this trend for cities.
Renters in their 60s, especially those who are still working, are often earning the highest incomes in their respective careers and are seldom burdened by child-care costs. According to research by Morgan Stanley, baby boomers control 70 percent of the disposable income in the country and spend money in ways similar to millennials.
“Both young and old renters," says Trekson, "can be seen as a boon to tax revenues.”