Thursday, July 26, 2012

A Bit More on Foreclosures

I generally don't like AARP.  They operate more like an insurance company than anything else, and their commitment seems to be mostly to the richer old, who can take the tours and buy the products they offer.  As a very young woman, I decided that I'd never give them a sou when they accepted the increase in the retirement age for Social Security recipients.  But that was consistent with their attitude, as poor elderly aren't really their constituency.

But I will recommend this.  What surprised me was the extent of distress for population sectors that should be relatively stable.  But then I thought about it, and realized that the current distress in the over-50 crowd is the result of the stresses we've faced since we were young.  For instance, in 1989, 37% of the 55-64 age band households had mortgage debt.  In 2010, 53% were still carrying mortgage debt.  Thinking back, that's because most of us didn't buy houses in our 20s, but in our 30s, because housing prices had increased, especially after the early 1970s, while wages had decreased.  Our generation was always more stretched than our parents.

But that doesn't explain everything, as households in the 65-74 age band also have more mortgage debt.  This group may well have purchased in the period before the great inflation, which would mean that they'd be paying off at least some mortgage debt in very cheap dollars.  But if they bought second and third houses, at least some of that benefit was lost.

More thinking later.

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