Mortgage-burning parties in the U.S. may be going the way of home milk deliveries and polyester leisure suits. A growing number of homeowners are reaching retirement age still owing money on their houses.
The share of Americans 65 and older with mortgage debt rose to 30 percent in 2011 from 22 percent in 2001, according to a May analysis by the Consumer Financial Protection Bureau. Loan balances also increased, with the median amount owed climbing to $79,000 from $43,400 after adjusting for inflation.
The increase in mortgage debt may influence labor-force dynamics as some older Americans find they’re unable to completely retire, needing extra cash to keep up monthly payments. It also diminishes home equity and wealth, making these households more susceptible to swings in the economy and curbing spending on things such as vacations and visits to grandchildren.
Source: Bloomberg News