Retirement & Financial Planning Report

While households headed by persons age 65 and up are more likely to have debt, and more of it, than those of a generation before, those figures are down from their peak and much of that debt is for mortgages on homes, which traditionally increase in value, according to a report for Congress.

The Congressional Research Service said that the percentage of such households that held any debt increased from 37.8 percent in 1989 to 61.1 percent in 2016, and among those with debt, the average debt increased from $29,918 to $86,797 and the median—where half are above and half are below—from $7,463 to $31,050, both in 2016 dollars.

However, the average number is down from its high of just above $100,000 and the median is down from its high of about $35,000 in 2010, just after the Great Recession, and now stand at about the levels of 2007 before the recession.

Also, the increase in debt “largely resulted from mortgages,” the report said, which “might have resulted from the increased availability of mortgage credit, whereas others argue that tightening underwriting standards on mortgage debt in the wake of the financial crisis have slowed mortgage originations among young borrowers, which consequently resulted in a shift of new mortgage originations toward older borrowers. Residential loans are usually considered to be long-term wealth builders, as the residence’s market value may increase over time.”

Mortgages account for 66.8 percent of that debt, far above the shares for car loans (6.1) and credit card balances (3.5) for example—both of which also come with higher interest rates than mortgage debt. “Researchers have found that both residential and nonresidential debt may contribute to debt-related stress for older households, but residential debt is much less stressful than other debt, such as credit card debt,” it said.