TY  - JOUR
AU  - Sinai,Todd
AU  - Souleles,Nicholas S.
TI  - Net Worth and Housing Equity in Retirement
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13693
PY  - 2007
Y2  - December 2007
UR  - http://www.nber.org/papers/w13693
L1  - http://www.nber.org/papers/w13693.pdf
N1  - Author contact info:
Todd M. Sinai
University of Pennsylvania, Wharton School
1465 Steinberg Hall - Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
Tel: 215/898-5390
Fax: 215/573-2220
E-Mail: sinai@wharton.upenn.edu

Nicholas S. Souleles
Finance Department
The Wharton School
2300 SH-DH
University of Pennsylvania
Philadelphia, PA  19104-6367
Tel: 215/898-9466
Fax: 215/898-6200
E-Mail: souleles@wharton.upenn.edu
AB  - 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.
ER  -