Older Homeowners Face Rising Mortgage Debt

Retirement may have to wait.

The New York Times reports that a growing number of older homeowners carry mortgage debt, which could inhibit their path to retirement.

Two studies found that 50 percent of people age 55 and older had mortgages, home equity loans or lines of credit in 2013, compared to 38 percent in 1998. Among people 65 and older, housing debt rose to 35 percent in 2012 from 23.9 percent in 1998. Older homeowners today owe a median of $82,000, up from $44,000, and the share of homes underwater more than doubled, from 3 percent to 8 percent.

What’s unclear, economists say, is whether this debt crunch will turn out to be a one-time phenomenon. Is it a consequence of an imploding housing market that will not recur, or an ongoing reality that now must be factored into most Americans’ retirement planning? … [Research done by economist Dr. Barbara Butrica] has shown that older people with mortgage debt tend to stay in the labor force longer, and to delay receiving Social Security benefits.

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