The World Economic Forum (WEF) and Marsh have released a report warning that housing unaffordability will remain a critical economic and health challenge through 2040. Without intergenerational solutions, financial stress, poor health outcomes, and wealth erosion will compound for both younger and older adults globally.
Global Affordability Crisis
The analysis across 21 countries reveals that in 20 of them, monthly mortgage and rental payments exceed 33% of monthly income—the affordability threshold. The burden is most severe in Nigeria, Colombia, India, Indonesia, Vietnam, Brazil, and Mexico, where payments exceed 100% of an individual's average monthly earnings. Even where prices have fallen relative to wages, affordability has not improved. In Brazil, India, and Indonesia, prices dropped more than 15% over the past decade, yet payments still outstrip a single person's earnings.
Demographic Pressures
Demographic shifts will intensify the strain. Between 2025 and 2040, the older adult population in high-growth economies will increase more rapidly than in already aged countries. This forces younger workers to balance rent or mortgages with saving for longer lives and caring for multiple generations. The WEF notes that expensive housing may push people into poor-quality, cramped, or isolated homes away from jobs and services, creating a vicious cycle of financial stress, medical expenses, and reduced long-term savings.
Behavioral Consequences
The report also flags behavioral impacts. With wealth accumulation blocked, younger adults are embracing risky financial strategies such as speculating with cryptocurrency and prediction markets. In high-income OECD countries, rising prices since 2015 have pushed more young adults to live with parents into their twenties.
Intergenerational Housing Models
To break the cycle, the WEF highlights intergenerational housing models. In Spain, Kuvu connects older homeowners with young renters, reducing loneliness while providing income for older adults and affordable housing. A public-private partnership in the Basque region helps scale it. In London's Southwark, the Appleby Blue Almshouse won the 2025 RIBA Stirling Prize for reimagining social housing for older adults, offering a high-quality alternative to aging in place and freeing up larger family homes. In Hong Kong, Forward Living uses Nordic design principles to make institutional care feel like home, prioritizing dignity and autonomy.
Call to Action
The report concluded that housing must be reframed as a lifelong issue, not a generational one. Acknowledging the challenges faced by all generations can facilitate collaboration and drive better outcomes for all, as countries race to link housing policy to health and wealth before the 2040 demographic shift peaks.
