Retirees counting on home equity may face financial shortfalls

For generations, homeownership has been one of the primary ways Americans built wealth and passed it on to loved ones.

Now, financial advisers and housing experts warn that many older homeowners may be counting too heavily on their homes as But a more recent study from the Federal Reserve Bank of Philadelphia found that older homeowners often receive lower prices when selling compared with younger owners — even when properties are otherwise similar.

The discount grows with age. Researchers found that an average 80-year-old seller could receive about 5% less than a 45-year-old homeowner, the Times “The real question is, where are they transitioning to?” Dan Sudit, a wealth adviser and partner at Crewe Advisors in Salt Lake City, told the Times. “It might not be a two-bedroom or a one-bedroom, but might wind up being a studio-type unit.”

Aging homes, aging owners

Housing professionals say one major factor behind the pricing gap is “You’ve got the avocado bathtub and yes, the fridge works fine, but it’s harvest gold,” said Beverly Grace, owner of Grace Realty and Property Management in Seminole, Florida. “It all looks really wonderful to them, but they didn’t change anything to go with the times.”

Reverse mortgages still face resistance

Some industry professionals argue that reverse mortgages could help older homeowners unlock equity without rushing to sell — but the products continue to carry stigma decades after their introduction.

Michael Banner, a reverse mortgage educator and leader at American Pacific Mortgage, recently told HousingWire‘s Reverse Mortgage Daily that misinformation “The horror stories are real. But the truth is, at least for the last 16 years, it’s been a great product,” he said. “We protect the younger borrower, the surviving borrower, we protect the While those deals can simplify transactions, experts say they frequently result in lower sale prices. For some retirees, however, speed and certainty outweigh maximizing profit.

Bob Bozek, 73, and his husband, Dan Driscoll, 81, sold their condominium near Fort Lauderdale, Florida, in 2024 — citing rising insurance costs, health concerns and increasing