Housing Debt Gone Awry, Or Age Does Not Necessarily Bring Wisdom
Following are some numbers that show how Americans have changed the way they look at debt–and not for the better. As these numbers show, age does not always result in cautious actions.
According to the Employee Benefit Research Institute, the percentage of Americans that were 65 to 74 and had housing debt were as follows:
- 1992–18%
- 2004–32%
- 2007–43%
And the Employee Benefit Research Institute also states that Americans in the 65 to 74 age group had the following median amount of debt. Both numbers are in the equivalent of 2007 dollars.
- 1992–$24,609
- 2007–$69,000
The 2007 numbers are the most recently available. As updated numbers become available in the coming years, we will see if we return to our past more prudent debt levels.
A few options exist: The economy improves; we learn our lesson and become more financially prudent. Or economic conditions improve; we develop a short memory and return to bad habits that queue ourselves us for another ride on the bubble wheel. Or, finally, “the crisis of 2008 represents something much more fundamental than a deep recession” and economic conditions change to the point that we have no choice but to return to our more frugal financial roots.
Source: Tom Lauicella, “Pay Off Your Mortgage,” The Wall Street Journal
GRAPH: THE FEDERAL RESERVE/MY BUDGET 360
Note: The quote is from NY Times columnist Thomas Friedman.