HOME EQUITY IN RETIREMENT
Makoto Nakajima () and
Irina Telyukova ()
International Economic Review, 2020, vol. 61, issue 2, 573-616
Abstract:
Retired homeowners dissave more slowly than renters, which suggests that homeownership affects retirees' saving decisions. We investigate empirically and theoretically the life‐cycle patterns of homeownership, housing, and nonhousing assets in retirement. Using an estimated structural model of saving and housing decisions, we find first that homeowners dissave slowly because they prefer to stay in their house as long as possible but cannot easily borrow against it. Second, the 1996–2006 housing boom significantly increased homeowners' assets. These channels are quantitatively significant; without considering homeownership, retirees' net worth would be 28%–44% lower, depending on age.
Date: 2020
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https://doi.org/10.1111/iere.12435
Related works:
Working Paper: Home Equity in Retirement (2019) 
Working Paper: Home Equity in Retirement (2011) 
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Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:61:y:2020:i:2:p:573-616
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