Approximately 30 percent of the 41 million Americans older than 65 years old have mortgages, according to a recent report from the Consumer Financial Protection Bureau. That number has increased by 2.3 million since 2001.
Older consumers generally are carrying more debt, including mortgage, credit card and student loan debt, into their retirement years than in previous decades, according to the report.
Seniors still make up the largest percentage of homeowners, with 80 percent of Americans older than 65 owning their homes. While their homeownership rates have remained fairly constant during the last decade, however, the percentage of older homeowners with mortgages has increased. The number of American seniors with mortgages increased to 6.1 million from 3.8 million from 2001 to 2011.
Both the amount owed by seniors and the foreclosure rate also have increased. From 2001 to 2011, the median amount owed by older homeowners on mortgages increased 82 percent to about $79,000 from $43,300. Delinquencies increased fivefold from 2007 to 2011.
The CFPB attributed the larger number of seniors with mortgages to the refinancing boom of the 2000s. The bureau also cited a tendency for Americans to buy their first home later in life, provide small down payments on home purchases, and borrow against their home equity to pay for other expenses.
The CFPB also issued an advisory addressing issues it deems important for older Americans to consider while managing mortgage debt in retirement.
About a third of the complaints CFPB receives from seniors concern mortgage problems, the bureau said.
“A home can be a place of security for older Americans in their retirement years – a roof over their heads as well as a valuable asset,” said CFPB Director Richard Cordray. “But as more seniors carry significant mortgages into retirement, they put themselves at risk of losing their nest eggs and their homes.”
The report on senior lending issues follows last month’s report on student loans, which highlighted co-signor difficulties.