(UM07-20) - Housing Prices, "Bubbles" and Retirement Timing
Martin Farnham and Purvi Sevak
In the past decade, many homeowners have seen their net worth increase significantly due to increasing house prices. Given high home ownership rates among the retirement age population and the importance of home equity in their portfolios, there is significant potential for retirement responses to these gains. This is particularly true given the increasing mobility of retirees, the growth of home equity loans, and the emergence of a reverse mortgage market. We will use the HRS linked with local data on house prices and labor market conditions, to estimate whether unexpected increases in the house prices leads to earlier retirements.