Americans who lost their homes to foreclosure during the 2007-2009 financial crisis are still renting in their 50s, and many say they are treated as though the collapse was their own fault. The Great Recession cost roughly 9.3 million Americans their jobs and triggered about 7.9 million foreclosures between 2006 and 2014, according to data tracked by the Federal Reserve and real estate research firm CoreLogic.
For people who were in their late 30s and 40s when the housing market crashed, the timing was catastrophic. They lost both income and home equity at the same moment, wiping out savings that would normally have funded a down payment on a second home later in life. Now, with the median U.S. home price near $420,000 and 30-year mortgage rates hovering above 6%, re-entering the market is out of reach for many.
The stigma persists even though the foreclosure crisis was driven by predatory lending, collapsing mortgage-backed securities, and a banking system that nearly failed. A 2011 report from the Financial Crisis Inquiry Commission found that the crisis was avoidable and caused by widespread failures in financial regulation and corporate governance. Homeowners were often the last to be blamed by the system and the first to be blamed by neighbors.
"Some people did everything right," one renter told MarketWatch, describing a career spent working steadily only to watch a lifetime of equity vanish in a foreclosure that was driven by forces outside their control.
The financial damage compounds over time. A 2023 study from the National Bureau of Economic Research found that households that experienced foreclosure during the crisis had significantly lower credit scores, reduced access to credit, and lower homeownership rates a decade later compared with similar households that did not. The effects were most severe for borrowers in their 40s and 50s, who had less time to recover before retirement.
Renting in your 50s also carries a practical cost. Rental prices have risen faster than wages in most metro areas since 2020, and fixed-income renters face annual increases that homeowners with fixed-rate mortgages do not. The median asking rent in the U.S. was $1,995 in early 2024, up roughly 30% from 2019, according to Zillow.
For those still working, the path back to ownership is narrow. Lenders typically require a credit score of at least 620 for a conventional loan, and foreclosure remains on a credit report for seven years. Many people who lost homes in 2009 and 2010 have only recently cleared that mark, by which point prices had already doubled in many markets.
The result is a cohort of Americans approaching retirement without the home equity that previous generations relied on to supplement Social Security and savings. Roughly half of U.S. households aged 55 to 64 had no retirement savings at all as of 2022, according to the Federal Reserve's Survey of Consumer Finances.
