Boomers cashed in on their homes

MarketWatch: A new report from the New York Federal Reserve shows older Americans have been ramping up their debt while younger Americans have not.

In real terms, debt in the hands of Americans between 50 and 80 years of age has increased by 59% since 2003. At the same time, the aggregate debt of those age 39 has dropped by 12%, the report released Friday shows.

The New York Fed report examines why. Mostly it’s a function of the housing boom and bust.

Home-secured debt, per capita, has surged 47% for those age 65, for an increase of $11,191, while it’s dropped 28% to $8,195 for those aged 30.

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That makes sense as older Americans with a home, facing declining prices after the housing market collapsed but also declining interest rates, refinanced. At the same time, younger Americans were less able to get on the housing ladder, either because they didn’t want to since their job prospects were diminished and they were struggling with student debt, or they couldn’t because banks had made lending more difficult.

We will also find that the new home sales were dominated by boomers taking retirement, taking advantage of the Chinese home buyers. But the  millennials cannot afford rent, especially here in California.  The middle class exit from California is a mix, retirees going to cheaper environments, and middle class millennials doing the same.  Does the legislature ut here get the problem? No, they are busy comparing breast size.