A review on American senior housing and financing decisions

Abstract

Purpose The world population is getting older and housing decisions matter to the security of retirement life and well-being. However, senior housing and financing decisions are largely overlooked in the literature. This study aims to provide a comprehensive overview of the senior housing and financing decisions in the USA. Design/methodology/approach Using 2021 American Housing Survey data and ordinary least squares estimates, this paper studies senior housing and financing decisions in the 15 most populous US metropolitan areas. Multiple regressions are used to analyze the whole sample as well as various subsamples. Findings This paper finds strong evidence that seniors are more likely to own a house with a higher market value compared with nonseniors. More specifically, although race and gender do not matter in this relationship, it is less pronounced among those with higher education. Also, seniors, especially white senior homeowners, are more likely to have a lower mortgage debt burden due to a higher upfront down payment than nonseniors. Last, seniors are more likely to refinance their homes and receive cash than nonseniors. Research limitations/implications Constrained by the data limitations, this study specifically focuses on seniors’ housing and mortgage decisions. Future research could involve exploring seniors’ mortgage decisions by considering factors such as mortgage loan terms, borrower credentials and the evolving landscape of the senior housing market, among other aspects. Practical implications The findings would help policymakers and contractors in the construction industry better understand the uniqueness of challenges in the senior housing market and develop effective housing policies and programs that cater to the needs of the elderly. A comprehensive understanding of the senior housing market would also help seniors make informed purchase and financing decisions. Social implications The authors propose providing financial education to the elderly, particularly those of disadvantaged status, to improve their expertise and bargaining skills in the mortgage loan application process. Originality/value This paper contributes to understanding the dynamic senior housing market, which encounters challenges and opportunities associated with the aging population. The study fills the gap of limited research regarding seniors’ housing decision and their financing choices in the USA and would help policymakers and contractors in the construction industry develop effective housing policies and programs that cater to the needs of the elderly.