The median amount of retirees’ housing debt also tripled in that time, to about $61,000, adjusted for inflation.
Even among the oldest households —headed by people age 75 and up — 1 in every 5 had housing debt, up from 5.8 percent in 1989.
These families were able to trade up to larger homes or borrow against their equity when property values ballooned during the last decade and lenders loosened their credit standards. As a result, many people took on mountains of home debt to pay off credit cards and to finance bigger houses, home improvements or college tuitions.
That means more households now head into retirement with high monthly payments, just at the time their incomes are sliding. AARP, the advocacy group for older Americans, is worried about the trend and recommends that homeowners try to pay off their mortgage before retirement.
"The more they can reduce their expenses when they’re not working, the better off they’ll be," said Jean Setzfand, AARP’s vice president for financial security. "The mortgage payment is one thing that’s predictable, and a goal that people should work for, in terms of removing that expense from their ledger." Salt Lake Tribune
