Study: Seniors Housing Now More Popular Among Those with Higher Incomes
Higher income seniors are now more likely to occupy seniors housing in their elderly years than those with moderate and low incomes, according to a study conducted by the National Association of Real Estate Investment Trusts (NAREIT).
This is a reverse from two generations ago, when higher-income seniors were more likely to age in place and those with lower incomes were more likely to move into subsidized seniors housing or an institution sponsored by a religious organization.
Similarly, the percentage of elderly people entering seniors housing has increased compared to past times when most older Americans remained in their home for as long as physically possible.
“The growth of the overall senior housing sector, the shift towards facilities that offer higher levels of services and amenities and the changing relationship between wealth and residency in a senior facility suggest that members of the Baby Boom generation may choose to live in senior housing at a higher rate than did earlier generations,” according to the study.
The study examined the demographic and financial determinants of housing choices of older Americans, and how they have changed over the past several decades. NAREIT used information from the Panel Study of Income Dynamics (PSID), a nationally representative survey from 1968 to 2011, in order to reach its conclusions.
Underlying the shift toward higher income individuals moving into seniors housing is a shift in the mix of seniors communities, from predominantly those focused on medical needs and skilled nursing to newer retirement communities with a higher level of non-medical services, activities and amenities.
“Some of the largest increases in penetration rates… are not among the over-80 cohorts that constitute a majority of residents, but rather are among the middle of this age range, with particularly large increases among 70 to 74 and 75 to 79 year olds,” according to the study.
Other factors include the elimination of responsibility for repair and maintenance of a home and property as well as the activities and sense of community found in many of the more modern facilities.
The trends suggest that the aging Baby Boom generation’s effects on senior living communities may extend beyond those merely related to its size. With a large number of high-wealth individuals in the Baby Boom generation, demand for high-end retirement communities may experience a particular rise in the years ahead.
The age at which older Americans move into seniors housing has shifted forward over the past two generations, and the front edge of the Baby Boom generation will soon be approaching the age range when moving to a senior community becomes a realistic consideration
NAREIT is an advocacy organization serving REITs and publicly traded real estate companies with an interest in US. real estate and capital markets.
— Haisten Willis