A recent study reveals that fewer homeowners are retiring without owing a mortgage.

The study, prepared by the Joint Center for Housing Studies at Harvard, found significant changes in debt patterns from 1990 to 2000.

While homeowners used to pay off their mortgage in 20 years and retire in a free-and-clear home, this trend is experiencing quite an extinction.

Homeowners are using their equity in new ways to fund a variety of housing and personal expenses.

In 1989, 54% of homeowners between 55 and 64 were mortgage free. In 1998, only 39% were mortgage free.

There are many reasons pointed out in the study to be factors in the rise of mortgages in those nearing retirement age -- waiting to marry, divorce, remarriage, two-paycheck families, living longer and health care costs. The increasing financial needs of the American family has also contributed to the emergence of higher mortgage debt for retirees.

Across the board, homeowners in all age groups have significantly more debt than ever before. According to the Federal Reserve, the average debt of a homeowning household grew from $40,600 in 1990 to $58,700 in 2000. Roughly 60% to 80% of the debt was from mortgages.

In 1990, the median mortgage debt for 45 to 54 year olds was just over $25,000 (adjusted for inflation). In 2000, the age group had a median debt of $50,000.

The study expects that in ten years, the next group of 45-54 year olds will have a housing debt of over $70,000. This may be higher or lower depending on the rate of house price appreciation for the decade.

The study concludes that there could be severe repercussions due to the mortgage levels rising for retirees. More homeowners may have to continue past retirement age in the workforce. Some may need to sell their homes just to retire. It may drive retirees to locations where property isn't as expensive.

"Housing debt in old age could divert money away from spending on other necessities such as food, heat, and utilities or health care," said the study.

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies! Article Source: http://EzineArticles.com/?expert=Martin_Lukac