Association for Public Policy Analysis & Management

Since the 1990s, US home prices have swung up and down and then back up again, in a dramatic cycle of boom, bust, and recovery. Rents have risen without interruption. At the same time, housing prices in prosperous urban areas have pulled away from those in declining urban and rural areas. Older adults are more likely to be affected by increases in housing prices: older homeowners on fixed incomes may not be able to afford rising property taxes (though they benefit from increasing home equity), and older renters are especially vulnerable to rising rents. The divergence of housing prices in different areas of the country may also affect the places where older adults can afford to move. Older adults living in places with high and increasing housing prices face pressures to move towards less expensive places, while older adults living in places with lower housing prices may be unable to move towards more expensive places.

In this paper, we investigate two main research questions. First, how have changes in housing prices during the 2000s housing boom, bust, and subsequent recovery altered housing affordability constraints for older renters and homeowners? Second, has the divergence in housing prices between various areas of the US affected inter-regional residential mobility among older adults? We examine housing affordability and residential mobility patterns for adults over age 50 living in high-cost, mid-cost, and low-cost areas from 2000-2016, using household-level data from the Health and Retirement Study, combined with county-level contextual data from the US Census and American Community Survey, as well as the US Department of Housing and Urban Development 50th Percentile Rent Estimates and the Zillow Home Value Index. To assess housing affordability for older adults, we compare their income and wealth with their current housing costs, housing prices in the region where they live, and housing prices in more- and less-expensive regions.

We find that both homeowners and renters living in high-cost areas remain in place at higher rates compared with those living in mid-cost and low-cost areas. Among those who move, older adults living in high-cost regions move towards mid-cost and low-cost regions more often than the reverse. The differences are particularly pronounced for renters. The overall outcome is a net movement of older adults away from high-cost areas towards mid-cost and low-cost areas. These shifts have direct consequences for the well-being of older adults and broader implications for housing markets, where reduced turnover worsens housing shortfalls. The findings suggest that economic and spatial inequalities between renters and homeowners are exacerbated in later life, especially in the context of rising housing prices. This research contributes a new perspective to the literature on housing affordability and inter-regional moves, which mainly focuses on working-aged adults, and offers insights for policymakers working to find housing solutions for an aging population.