Previous generations of older Americans largely paid off their mortgage debt by the time they retired, but today, many older adults are housing cost burdened, paying more than 30 percent of their income on housing expenses. According to our analysis of the 2022 Survey of Consumer Finances (SCF), the share of homeowners ages 75 and older with a mortgage has almost tripled since 1998, reaching 30.1 percent in 2022. The amounts of debt seniors hold also continues to trend upward.

At the same time, many older homeowners have accumulated substantial home equity in recent years that could be tapped for a more comfortable retirement. The problem is they have limited opportunities to extract it.

Expanding the Home Equity Conversion Mortgages (HECM) program could make it easier and less costly for older homeowners to tap into their home equity and alleviate cost burdens. Given the increasing share of older adults with mortgages, these changes could help improve the financial security and housing stability of older homeowners, especially homeowners of color, who hold most of their wealth in home equity.

The share of homeowners ages 65 years and older with a mortgage has trended upward over the past two decades. In 1998, 10.9 percent of homeowners ages 75 and older had mortgages. That share increased to 13.0 percent in 2007 and to 22.0 percent in 2013. According to the latest SCF, 30.1 percent had mortgages in 2022. The share of homeowners ages 65 to 74 with mortgages has similarly trended upward, increasing from 29 percent in 1998 to 38 percent in 2022.

Over the same period, the number of older adults with mortgages has risen as the US population has aged. In 1998, about 728,000 homeowners ages 65 and older had a mortgage; by 2022, nearly 2 million did.

Moreover, the median amount of mortgage debt has also increased significantly. For homeowners ages 75 and older, median mortgage debt rose sharply to $106,800 in 2022, up from $66,369 in 1998—a 61 percent increase, after adjusting for inflation. This increase is substantive in dollar terms because mortgage debt is the largest type of debt homeowners carry, making up 99.4 percent of all debt for homeowners ages 75 and older. All age groups have experienced rising mortgage debt as home price increases have outpaced inflation, but homeowners ages 65 and older have been particularly affected.

The low interest rates during the COVID-19 pandemic gave borrowers the opportunity to refinance and lower their mortgage payments. Even so, the share of cost-burdened homeowners with a mortgage is up slightly from 2019. According to the 2022 American Community Survey, 40 percent of homeowners ages 62 and older with a mortgage were cost burdened, compared with 24 percent of homeowners younger than 62 with a mortgage.

Read the full article about older homeowners by Laurie Goodman, Linna Zhu, Katie Visalli, and Amalie Zinn at Urban Institute.