Aging Boomers Sit on Trillions in Home Equity, But Most Still Can’t Afford Long-Term Care

As America’s largest generation enters its twilight years, the question looms: is the country ready for the housing and healthcare needs of the baby boomers? A recent report from Harvard’s Joint Center for Housing Studies suggests a sobering answer not even close.

In just five years, the first baby boomers will hit age 80, ushering in a new era of long-term care (LTC) demand. While many boomers have accumulated significant housing wealth over decades of ownership, that equity hasn’t translated into real-world affordability for essential care services. The study reveals that only 24% of households aged 75 and older have the income needed to afford a daily visit from a home health aide after covering housing and basic expenses.

And it gets worse for certain groups. Among renters, households of color, and seniors with mobility or self-care challenges, the share drops dramatically. These groups are the least likely to afford even part-time help, despite often being the ones who need it most.

The Reality of Long-Term Care Costs

Aging in place is the preference for most older adults staying at home rather than moving into assisted living or nursing facilities. But doing so with proper support is out of reach for many. In 2021, a daily visit from a home health aide cost about $41,000 a year and prices have only risen since. Medicare covers very few LTC expenses, and Medicaid support is limited, inconsistent, and restricted to low-income households enrolled in state programs.

This leaves most LTC responsibilities to unpaid caregivers family, friends, or neighbors who juggle jobs and other commitments to provide care. The strain is considerable, and the growing number of seniors means this caregiving crisis is only escalating.

The study, which analyzed data from nearly 10 million U.S. households, found:

• Only 19% of solo senior households could afford daily paid care, compared to 43% of partner households.
• Just 9% of renters could manage daily care costs, versus 30% of homeowners.
• Among racial groups, only 14% of Black and 11% of Hispanic households could afford LTC out-of-pocket, compared to 26% of white households.
• For households with a resident needing help with mobility or daily activities, only 19% could afford daily assistance.

Middle-Income Households Are “Too Rich for Help, Too Poor for Care”

The squeeze is especially harsh for middle-income seniors those earning between 67% and 200% of area median income (AMI). They’re often ineligible for Medicaid, yet don’t earn enough to cover care costs out of pocket. Roughly two-thirds of this middle tier can’t afford daily LTC visits, leaving them stuck in a financial limbo.

Surprisingly, even among all households surveyed, 37% couldn’t even afford their housing and basic living expenses let alone the added cost of caregiving.

Tapping Home Equity: A Partial Lifeline

There is a silver lining: housing wealth. Many seniors own their homes outright and, on paper, have access to substantial untapped value. According to the study, if homeowners could borrow up to 80% of their home’s equity, roughly 1.6 million households could fund in-home care for up to five years. That would boost the share of seniors able to afford daily care from 24% to 41%.

But not everyone can or wants to borrow against their home. There are risks, especially for households already facing economic or health vulnerabilities. Liquidating home equity can reduce financial security and limit inheritance for the next generation. This is especially concerning for Black and Hispanic families, where homeownership gaps persist and housing wealth represents one of the few avenues for intergenerational mobility.

Renters, of course, don’t have home equity at all and see no benefit from this strategy.

What Needs to Change

With care costs rising, affordable housing scarce, and federal funding unpredictable, the report makes a clear case for systemic reform. Among the most urgent priorities:

• Fully fund Medicaid’s Home and Community-Based Services (HCBS) to ensure more Americans have access to home care without navigating long waitlists or uneven state-level programs.
• Expand Medicare coverage to include basic long-term care services, helping middle-income seniors who currently fall through the cracks.
• Increase support for renters, including housing vouchers and assistance for home modifications to make rental units safe for aging in place.
• Offer better financial tools and education for homeowners looking to responsibly access equity without putting their futures or families at risk.

The Road Ahead

The clock is ticking. With more than 70 million Americans over age 65 by 2030, the challenge of senior housing and caregiving is no longer a future problem it’s here. As the nation’s baby boomers prepare to enter their 80s, the conversation around elder care, affordability, and equitable support must take center stage.

The data is clear: most seniors aren’t ready but the country still has time to act. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.