Older Homeowners Hold Record Equity, but Rising Bills Could Leave Less for Their Heirs

Older homeowners are holding record housing equity, but rising costs associated with homeownership are increasingly straining their finances and could reduce the inheritance left for their heirs. In 2024, 28% of homeowners aged 65 and older were cost-burdened, spending over 30% of their income on housing and utilities, a higher rate than any other age group, according to the Harvard Joint Center for Housing Studies’ State of the Nation’s Housing 2026 report. This financial pressure exists despite baby boomers alone holding approximately $19 trillion in home equity. Joel Berner, senior economist at Realtor.com®, stated that constrained incomes are the primary driver of this high cost-burden rate, exacerbated by disproportionately increasing ownership costs for older homeowners. Evidence suggests some owners are tapping into their equity to manage these expenses, with FHA-insured reverse mortgage originations increasing to nearly 28,000 in fiscal year 2025, up from about 26,500 in the prior year, as reported by the Department of Housing and Urban Development. Real estate agent Bruce Ailion warns that these financial decisions will likely result in smaller inheritances than younger generations expect, suggesting the anticipated "Great Wealth Transfer" may not materialize as widely assumed. The overall number of cost-burdened homeowner households increased by 4 million between 2019 and 2024, reaching 20.7 million.