Older adult Americans are holding on to their big houses longer. Should they do this? Here are three options in the American context for how older adults could approach housing in terms of what they might owe younger adults regarding housing.
- They owe younger adults nothing. Older adults worked hard to acquire and maintain their properties. They are holding on to them as valuable assets that can continue to appreciate in value. If they can stay in the homes (considering finances and health), why shouldn’t they stay in the homes they selected as long as they can?
- They owe younger adults something. Older adults can balance what they would like as they age – staying in their homes, cashing out the value of those properties – with also helping younger adults who desire housing. This might look different for a variety of households and locations.
- They owe younger adults everything. Older adults should actively work to pass along their homes and properties (and their associated wealth and opportunities) to younger people. They should make way for future generations who could benefit from the housing they benefited them. They are passing along a housing legacy that can enrich their children and grandchildren. They have an obligation to insure housing is readily available for those who come after them.
This is a rough approximation of options available within the United States. Numerous articles in recent years highlight this dynamic of generational shifts in housing options and preferences. The housing situation in the United States is unique – emphasizing single-family homes, limited supply, high mortgage interest rates, a big Baby Boomer generation, decades-long housing value increases, and more – and Americans tend to think that housing is a market, not a human right.
Fast forward ten or twenty years down the road: I would guess Americans will follow some middle option above. Some older adults will want to or have to pass along housing, others will hold onto it as long as possible. What might be most interesting is if some of those big houses stop rising in value so much or even lose value – how much might this change the dynamics in housing turnover?