The Housing Crash and the Retirement Prospects of Late Baby Boomers
AbstractThis paper extrapolates from data from the 2004 Survey of Consumer Finance to project household wealth, by wealth quintile, for the cohort that will be between the ages of 45-54 in 2009 under three alternative scenarios. The first scenario assumes that real house prices fall no further than their level as of March 2008. The second scenario assumes that real house prices fall an additional 10 percent as a 2009 average. The third scenario assumes that real house prices fall an additional 20 percent for a 2009 average. The projections show that the vast majority of families in these age cohorts will have little or no wealth by 2009 in any of these scenarios and that the cohorts just approaching retirement will have very little to support themselves in retirement other than their Social Security. The projections also show that a large number of families in these age cohorts will have little or no equity in their homes in 2009. Finally, the projections show that the renters within the same wealth quintiles in 2004 will have more wealth in 2009 than homeowners in all three scenarios.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2008-18.
Length: 11 pages
Date of creation: Jun 2008
Date of revision:
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housing bubble; retirement; home equity; household wealth;
Find related papers by JEL classification:
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
- L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
- E - Macroeconomics and Monetary Economics
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
This paper has been announced in the following NEP Reports:
- NEP-AGE-2008-11-18 (Economics of Ageing)
- NEP-ALL-2008-11-18 (All new papers)
- NEP-MAC-2008-11-18 (Macroeconomics)
- NEP-URE-2008-11-18 (Urban & Real Estate Economics)
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