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Reports US

US stock market daily report (May 08, 2014, Thursday)

May 9, 2014, Friday, 04:41 GMT | 23:41 EST | 08:11 IST | 10:41 SGT
Contributed by Millennium Traders


According to a report from the Consumer Financial Protection Bureau, the biggest threat for many older Americans retirement financial security could be the roof over their heads as many seniors continue to carry a mortgage on their homes, into retirement years. The number of seniors carrying mortgage debt into retirement years has risen from 22% during 2001 to 30% in 2011. For older Americans during the same time period, median mortgage balance for seniors nearly doubled from $43,400 during 2001 to $79,000 in 2011.

Per CFPB, factors that contribute to the problem “include a general trend among 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 a variety of expenses.” CFPB said, “Much of the increase can be attributed to the refinancing boom of the 2000s.”

For nearly 60% of 4.4 million seniors, 30% of their household income that was to help their retirement funds is being poured into housing costs. According to CFPB, during 2011, older homeowners with a mortgage spent $800 more per month or $1,257 on housing than their counterparts without a mortgage in the amount of $434.

In the USA according to the latest Census data, senior homeownership rates are the highest of any age group - 80% - and have virtually remained unchanged since the recession, while homeownership rates for younger consumers have steadily fallen.

Older seniors' financial health is far more vulnerable to economic downturns due to such a high amount of their wealth being invested in their homes. With this in mind, nearly two-thirds of homeowners with mortgage debt remain employed at the age of 64, compared to half of homeowners who have paid off their mortgages. Seniors are taking a new approach toward retirement due to high mortgage debt as well as the lack of liquid assets facing such huge changes.

The housing crisis of 2008 weighed heavily on older retired homeowners. According to the U.S. Census, after the housing crisis, older Americans' actual net worth took a sharp downturn from a median net worth of $170,516 to only $27,516.