More Retirees Face Growing Mortgage Debt
DAILY REAL ESTATE NEWS | MONDAY, NOVEMBER 21, 2016
A growing number of older homeowners are carrying larger amounts of mortgage debt into retirement.
More than three-quarters of Americans over the age of 65 are homeowners, and their homes generally make up their largest single asset. But too often, there’s little equity remaining, even though home prices have mostly recovered. Many older owners have borrowed against their homes.
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When home values rose more than 60 percent between 2000 and 2006, many homeowners refinanced and took out home equity loans or lines of credit. Now, they’re faced with the prospects of facing retirement with large amounts of debts and for some, it may be too much and they may be forced to sell.
Fifty percent of homeowners over the age of 55 still had a mortgage, home equity loan, or line of credit in 2013 compared to just 38 percent in 1998, according to a recent analysis from Boston College. A separate Urban Institute study revealed that the proportion of home owners over the age of 65 with housing debt increased to 35 percent in 2012 from 23.9 percent in 1998. The median amount owed nearly doubled too – from $44,000 to $82,000.
For some retirees, this has prompted them to look at selling their house to downsize or finance a move to a retirement community.
Source: “They’re Growing Older. Their Mortgage Debt Is Growing Deeper,” The New York Times (Nov. 18, 2016)