Gen X: The Foreclosure Generation
Posted On January 15, 2013
A new study by the St. Louis Fed takes a look at the housing crisis, particularly foreclosures, and finds a mixture of predatory lending and household overreach to blame. The hardest-hit demographic has been Generation X and, according to the Fed, Xers share some of the blame.
Generation X has been the most likely to be foreclosed but also the most likely to have overreached. The median age of a foreclosed homeowner is 44. The least likely to be foreclosed: Boomers with a median age of 52. The most surprising finding of the study, though, is that many Xers overreached and ended up losing their homes. Xer overreach accounts for fully 1 in 10 foreclosures since 2008, according to the study.
Xers with reasonably comfortable incomes and above average educations made up about 10% of all foreclosures. While we usually categorize Xers as cautious and skeptical, in this case, their life stage of career peak/typical homebuyer, coinciding with the peaking real estate market pre-2008, seems to have gotten the best of them. They bought in when the market was at its highest only to see it crash shortly thereafter. Some of that characteristic caution would have come in handy for more than a few of them.