Burning the mortgage is getting tougher

BOSTON -- Aug. 1, 2006 -- About 25 percent of Americans age 65 or older have yet to pay off their home loans, compared with 11 percent in 1983, according to a Boston College analysis of Federal Reserve Board data.

Half of the people in the 55- to 64-year-old bracket owed money on their homes in 2004, up from 37 percent in 1989.

At a time of life when previous generations usually had paid off the mortgage, many Americans are just scraping together a downpayment. In a strong housing market, this kind of optimism may be justified, but if home values plunge or interest rates soar, older homeowners could be in trouble.

"As long as you can still find a job at an older age, as long as the housing market remains strong, it's not a terrible thing," said Zhu Xiao Di, a senior research analyst at Harvard University's Joint Center for Housing Studies. "But if bad things happen, it could be a problem."

Source: The Los Angeles Verdana,Arial, Jonathan Peterson (07/27/06)