WASHINGTON -- Ask Norm Edelen how old he'll be when his last mortgage payment is due, and he doesn't miss a beat. The answer: 100.
Not that he's troubled by the likelihood that his housing debt will last longer than he will: "It doesn't bother me at all," the 74-year-old San Bernardino resident said. "It's not something I ever thought I would live to complete."
Welcome to a new era in home borrowing, where long-term mortgages and home equity loans are taking their place alongside AARP cards and pension checks as never before. About 25% of all Americans over age 65 have yet to pay off their home loans, up from 11% in 1983, according to a Boston College analysis of Federal Reserve Board data.
For many older homeowners, such as Edelen, the decision to carry housing debt deeper into their twilight years is by choice. They see their homes -- rather than savings accounts -- as piggy banks that can be tapped through home equity loans or refinancings to provide ready cash.
But the trend also reflects sober realities, including lifestyle changes from an earlier, more debt-averse era.
People who marry or remarry in middle age often find themselves making down payments on a home at a stage in life when their own parents had already paid off the mortgage. Others are able to pay off their mortgages, but opt to refinance to help make ends meet in retirement -- pushing their debt deep into old age.
A sure-bet housing market has limited the downside risk. Soaring home prices have boosted the equity people have in their homes, and low interest rates have often allowed them to tap this equity without raising their monthly payments.
"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 [economically], it could be a problem."
He added: "Whether this is alarming -- or people are just smarter than we thought -- I don't know."
If home values plunge or interest rates soar, for example, many homeowners could be faced with a squeeze. They would find it difficult to unload the property and shift into something smaller and cheaper, as older homeowners often seek to do. Older workers could be forced to delay retirement, if they are able.
