In the context of an aging population, tools to help elderly to live independently must be developed. The goal of this paper is to evaluate the possibility of using unobtrusively collected activity-aware smart home behavioral data to automatically detect one of the most common consequences of aging: functional health decline. After gathering the longitudinal smart home data of 29 older adults for an average of >2 years, we automatically labeled the data with corresponding activity classes and extracted time-series statistics containing 10 behavioral features. Using this data, we created regression models to predict absolute and standardized functional health scores, as well as classification models to detect reliable absolute change and positive and negative fluctuations in everyday functioning. Functional health was assessed every six months by means of the Instrumental Activities of Daily Living-Compensation (IADL-C) scale. Results show that total IADL-C score and subscores can be predicted by means of activity-aware smart home data, as well as a reliable change in these scores. Positive and negative fluctuations in everyday functioning are harder to detect using in-home behavioral data, yet changes in social skills have shown to be predictable. Future work must focus on improving the sensitivity of the presented models and performing an in-depth feature selection to improve overall accuracy.