Aging, Moving, and Housing Wealth
NBER Working Paper No. 2324 (Also Reprint No. r1144)
We have described the relationship between family attributes and moving, and between moving and change in housing wealth. Moving is often associated with retirement and with precipitating shocks like the death of a spouse or by other changes in marital status. Median housing wealth increases as the elderly age. Even when the elderly move, housing equity is as likely to increase as to decrease. Thus, the typical mover is not liquidity constrained, although some are. High transaction cost associated with moving is apparently not the cause for the lack of the reduction in housing wealth as the elderly age. The absence of a well-developed market for reverse mortgages may be explained by a lack of demand for these financial instruments. The evidence suggests that the typical elderly family does not wish to reduce housing wealth to increase current consumption. For whatever reason, there is apparently a considerable attachment among homeowners to past housing.