Net worth and housing equity in retirement

This paper documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004. The net worth of older households significantly increased during the housing boom of recent years. However
This paper documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004. The net worth of older households significantly increased during the housing boom of recent years. However, net worth grew by more than housing equity, in part because other assets also appreciated at the same time. Moreover, the younger elderly offset rising house prices by increasing their housing debt, and used some of the proceeds to invest in other assets. We also consider how much of their housing equity older households can actually tap, using reverse mortgages. This fraction is lower at younger ages, such that young retirees can consume less than half of their housing equity. These results imply that ‘consumable’ net worth is smaller than standard calculations of net worth. JEL Classification: G11, E21
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Metadaten
Author:Todd Sinai, Nicholas Souleles
URN:urn:nbn:de:hebis:30-52340
Series (Serial Number):CFS working paper series (2007, 34)
Document Type:Working Paper
Language:English
Date of Publication (online):2008/01/29
Year of first Publication:2007
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2008/01/29
Tag:Home Equity ; Housing ; Net Worth; Retirement
Note:
This paper was prepared for the Pension Research Council conference on April 23, 2007
HeBIS PPN:195112997
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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