The number of those age 65 and older and the size of their debt have risen. It’s the amount of debt that’s the killer.
The new retirement problem is Over 60 With Decades Left on the Mortgage.
A growing number of older Americans are carrying mortgage debt, and it will likely become more burdensome as the coronavirus crisis puts millions out of work and eats away at retirement accounts.
Many are still hurting from the financial crisis, which hit millennials when they were starting their careers and boomers during what were supposed to be their prime earning years.
In the U.S., some 9.18 million homeowners age 65 and over have mortgage debt, according to federal data analyzed by the Urban Institute. That’s up nearly 60% from 5.82 million a decade ago.
Housing Prices vs Wages vs CPI
This chart explains why the median mortgage debt has quadrupled since 1980.
Housing prices have dramatically outstripped wages and the CPI. That’s the problem for those who kept trading up or refinancing.
Those carrying a mortgage and depending on “inflation-adjusted” Social Security checks are likely to have a huge problem.
This setup is even more problematic for those unable to retire and now out of work due to the coronavirus.
The Huge Fear: How Do I Pay the Bills?
The huge fear now is How Do I Pay the Bills?
On April 6 in How High Will the Unemployment Rate Rise in April? I came up with an unemployment rate of 21-22% looking at job losses sector-by-sector.
In the last three week there have been 16.78 Million Unemployment Claims.
Unemployment claim analysis also leads to a 20% unemployment rate.
This is a huge debt deflation setup. How do the bills get paid?
This is yet another reason the Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.
There will not be a V-shaped recovery.