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Boomer Bust

The Napa Valley Register, 11/28/09

Abstract:

The impact of the sub prime lending spree, mortgage meltdown and subsequent home price decline has been well documented. During this process the housing spotlight has focused on those losing their homes to foreclosure, first time homebuyers taking advantage of low price levels and investors seeking discount opportunities.

One group left out of the spotlight, but deeply affected by the devalued home market, is the Baby Boom generation, defined by sociologists as those Americans born between 1946 and 1964. They now make up 28 percent of our entire population.
It is not surprising that this group would be left on the sidelines. The Boomers, typically long-term homeowners with built-up equity, were unlikely to have obtained a sub-prime loan or tapped their hard-earned equity.

Some turned their home into an ATM with excessive home equity lines and added mortgage debt. However, the majority of the baby boomers stood by, as if glued to a television screen, watching the explosive rise of their home equity during the real estate boom only to see that same equity erode during the subsequent bust.

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