Retirees may only access half of housing equity for consumption
Older households' net worth increased from 1993 to 2004, with assets appreciating. Housing equity grew, but not as much as other assets. Younger elderly people offset rising house prices by increasing housing debt and investing in other assets. Reverse mortgages allow older households to tap into housing equity, but younger retirees can only access less than half of it. This means they can consume less than what their net worth suggests.