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March 2020

Supply of age-restricted housing is increasing - and so are prices

March 6, 2020

Age-restricted housing accounted for only a small fraction of new home starts in 2018, but the volume for both single-family and multifamily starts were the highest recorded since 2009, when HUD and the Census Bureau began collecting data on this component.

Of the 875,000 single-family starts builders reported for 2018, about 29,000 (3.3%) were age restricted. A larger portion of multifamily homes were age-restricted, estimated at 31,000 of 375,000, or around 8.3%.

Age-restricted communities can take various forms, according to industry analysts. A typical restriction limits 80% of the ownership to an individual (or one of the owners) who is over a minimum age, often 50, 55 or 60. The Housing for Older Persons Act of 1995 allows housing developments to legally restrict the ages of its resident so long as it conforms to one of the set of rules in the Act.

Figures for the report were tabulated by the National Association of Home Builders (NAHB) using the Survey of Construction conducted by the U.S. Census Bureau and partially funded by HUD.

NAHB also used the data to compare sizes and prices of single-family homes in age-restricted and non-age restricted developments.

For homes started in 2018, the age-qualified single-family dwelling was approximately 2,000 square feet; in the non-restricted community it was 2,400 square feet.

Prices, whether measured by the sales price or square foot, were higher in age-restricted developments. A comparison of sales prices shows the home in the age-restricted community was about 2.5% higher than in a non-restricted location ($330,000 versus $322,000).

Based on square footage, purchasers of an age-restricted home paid $121 per square foot. That was about 16.3% more than what the buyer of a non-age-restricted home paid ($104).