This past month, the Consumer Financial Protection Bureau (CFPB) released new data specifically about older homeowners in the United States, revealing that nearly 700,000 retirees remain behind on making their mortgage payments in the aftermath of the COVID-19 coronavirus pandemic. While this figure has been reduced when compared with data from the second half of 2020, the figure is still very high and may affect certain multigenerational households at a higher level than others.
This is according to a blog post made by the Boston College Center for Retirement Research (CRR).
“[M]ost of the retirees in the CFPB report are largely reliant on Social Security, so their income is stable,” writes Kim Blanton for the CRR. “To understand why they’re having problems paying the mortgage requires reading the tea leaves in the CFPB report. More than half of the retirees with past due mortgages live with at least two other people, including children and teenagers.”
This has the potential to disproportionately affect multigenerational households due to the nature of income in such households, the post reads.
“Lower-income people in multigenerational households typically share the burden of paying their living expenses,” the post reads. “If a retired homeowner’s adult family member lost a job because of the pandemic, the homeowner might not be getting the money she needs to pay the mortgage. The CFPB survey confirms this is occurring: more than a third of older homeowners who are behind on their mortgages said a family member was unemployed.”
Many of those struggling reported retirement income of $25,000 or less or were people of color, the post reads based on the data. There is likelihood that many of the people who lost their jobs due to the pandemic were working jobs which were generally low-paying, which bore the brunt of much of the economic shock that was caused by the pandemic.
“The family members who live with them – presumably people of color – may have worked in lower-paid jobs, which bore the brunt of last year’s layoffs and reduced hours at work,” the post reads. “And it’s probably no coincidence that the spike in past due mortgages occurred during the long dry spell between the first pandemic relief check issued in the spring of 2020 to workers and retirees and the second round of checks early this year.”
Much media attention has been focused on the issue of renters which may be displaced, but the crisis faced by seniors is happening simultaneously and with less general attention.
“The media have paid a lot of attention to the several million renters who are in danger of being evicted if the CDC’s moratorium on evictions expires in October. Another housing crisis is unfolding more quietly among retired homeowners,” the post reads.
Read the post at the CRR’s “Squared Away” blog.