In those retirement years, owning versus renting a home has its advantages and disadvantages.

• According to the Joint Center for Housing Studies at Harvard University, over 7 million adults aged 65 and above rent their homes rather than own them.
• Renting a home later in life has both advantages and disadvantages.

Although older Americans own the most homes in the U.S., many choose to rent during their retirement.

While most older adults own their homes, over 7 million households rent instead, according to the Joint Center for Housing Studies at Harvard University.

Experts suggest that renting in retirement years can be advantageous because older individuals can avoid the expense of home maintenance. Additionally, renting provides the flexibility to relocate without the hassle of selling a home.

According to Jennifer Molinsky, director of the housing an aging society program at the Joint Center for Housing Studies, renting frequently provides more amenities, less maintenance, and greater accessibility.

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Younger and older renters both face the same issue: rising rent prices.

According to the Center's 2024 State of the Nation's Housing report, 22.4 million renter households were cost burdened in 2022, meaning they spent more than 30% of their income on housing and utilities.

Experts suggest that adult renters in retirement years may be more vulnerable to rent hikes due to their fixed income.

As a retired renter, you will have to pay a variable housing expense for the rest of your life, which is not fixed, according to Lazetta Rainey Braxton, CEO and president of The Real Wealth Coterie, a virtual wealth management and RIA firm.

Braxton is also a member of the CNBC Financial Advisor Council.

Why there are less older homeowners

In 2023, older baby boomers, defined as ages 69 to 77, made up the largest share of home sellers at 45%, according to the National Association of Realtors. These sellers were most likely to downsize their home. Younger baby boomers, defined as ages 59 to 68, also sold homes but in smaller numbers.

In 2022, the percentage of households aged 65 and over who own homes was 79.1%, down slightly from 79.5% the previous year, according to the Joint Center for Housing Studies. The highest rate was recorded in 2004 and 2012, at 81.1%.

The percentage of homeownership among individuals aged 50 to 64 decreased from 80.4% in 2004 to 74.2% in 2022, primarily due to the Great Recession, according to Molinsky.

It can be challenging to regain homeownership at the age of retirement, she stated. The Center predicted that the lower homeownership rate among them would indicate a future trend of lower ownership rates.

People who didn't purchase a home in their 40s and 50s are now growing old, resulting in an increase of renters entering their golden years, according to Teresa Ghilarducci, a labor economist, retirement specialist, and professor of economics at The New School for Social Research.

Pros and cons to renting in retirement years

Ghilarducci explained that being a renter does not necessarily mean being financially disadvantaged compared to homeowners.

The cost of maintaining your home will vary, but experts recommend budgeting between 1% and 4% of your home's value annually to cover typical home maintenance costs. For example, if your house is valued at $450,000, expect to budget from $4,500 to $18,000 for costs to upkeep your home.

Despite paying for the maintenance of your home throughout your working years, the components of your house still degrade during retirement, experts emphasize.

Fixing or replacing roofs can be challenging, said Molinsky. Moreover, there are tasks that you may no longer want to do yourself, and it can be costly to hire a professional, she added.

In 2023, homeowners spent an average of $9,542 on home improvements, which is a 12% increase from the previous year, according to Angi's State of Home Spending survey. Despite the increase in spending, the average number of projects decreased to 2.8 in 2023 from 3.2 in 2022. The survey polled 6,400 consumers between Oct. 22 and Oct. 23.

It's crucial to not only focus on purchasing a home for retirement but also to consider the care and services required to remain in that house, according to Molinsky.