Seniors are flocking south, but they are not buying homes

The days when our grandparents lived in the homes they raised our parents in, cradling memories and living out their years in paid-for properties, are long gone.

The number of seniors ages 65 and older who moved into rental properties rose 25%, or 2.4 million, according to a recent study. Point2Homes, a real estate listing website for American rental homes, conducted the study based on data from the U.S. Census Bureau, focusing on the 10-year period ending in 2023. The only other age group to see an increase was the 55- to 64-year-old age group, which saw about 484,000 additional renters over the same time period.

Why do seniors choose to rent?

The number of Americans age 65 and older has increased in recent years, which may be a factor behind the increase in the number of older renters as well. The population over the age of 65 rose 9.4% from 2020 to 2023, reaching 59.2 million, according to Census Bureau data.

While many retirees want to stay put, the key is to “age in place.” right Place,” said Jay Zygmunt, Ph.D., Certified Financial Planner (CFP), and founder of Childfree Trust. “Renting is an excellent option for seniors because they can rent to facilities that include housekeeping, concierges, transportation, and more. I regularly recommend that my senior clients rent, if for no other reason than to transfer household responsibilities to someone else.

There are many expenses associated with homeownership that renters should avoid: homeowners insurance, property taxes, and costs of maintenance and repairs. Much of this is unpredictable, and it is a serious blow to elderly couples’ budgets. Homeowners insurance rates have risen in some states, especially in at-risk areas.

Factors affecting where retirees rent

Some retirees decide to rent in their hometown, while others pack up and move their lives to another city, county, or state. However, they are usually looking for specific amenities and services in their homes and new chosen locations.

Realtor.com cites walkability as highly important, along with events and amenities worth walking to. These may include senior centers, social clubs and even gyms and fitness centres. Transportation services should be readily available.

Safety issues also impact, including the security of the buildings they rent, well-lit outdoor areas, and an overall low crime rate. Of course, quick and efficient access to healthcare is also of great importance.

Leading countries in the rental boom

Many locations across the country offer all of these options, some more affordable than others, but many retirees look for them in the Southern and Sun Belt states. Florida remains a favorite destination, according to Point2Homes. Seniors represent 21.3% of renters in the Sarasota area, while another 18.5% live in the neighboring Cape Coral/Fort Myers area. Jacksonville also made the list.

“Southern states, especially Florida, Tennessee and Texas, have become favorites because of their lower costs of living, lack of a state income tax, and weather,” Zygmunt said. “Moving from a high-tax state can mean seniors actually have 7% to 10% more money to spend, allowing their retirement savings to go a step further.”

Some other areas have attracted their share of seniors as well. Point2Homes gave the nod to Baton Rouge, Louisiana, and found that Omaha, Nebraska, and two Texas cities — Dallas and Austin — doubled their numbers of renting retirees over the 10-year period.

Another study also based Census Bureau data on popular destinations for retirement renters, including Massachusetts and Minnesota. Six of the top 10 locations on Hire a Helper’s list were Sun Belt states.

Bottom line

If you are retired and looking to move, renting may be the perfect solution. Consider Southern and Sun Belt states like Florida, Tennessee, and Texas, where you may find many other renters over the age of 65 as well. Renting is also a good option if you want to skip yard work and home maintenance, as well as home insurance costs that can be higher in some of these popular locations as well. Think about your budget, weigh the pros and cons of each destination, and know that if you choose to rent later in life, you’re not alone.