Downsize, Undermaintain, or Leave it as it is: Housing Choices of Elder Germans

Using German panel data from 1991 to 2008, I investigate housing consumption and homeownership of the elderly. Descriptive statistics reveal low mobility rates of elder Germans. Also, homeownership rates remain relatively stable in old age. Regression results for movers show that neither aging renters nor homeowners downsize housing consumption more often than younger households. Furthermore, after controlling, e.g., for house characteristics, elder non-moving homeowners do not spend less on maintenance but they are significantly less likely to undertake renovations. Widowhood shows an association with home negligence which suggests some decline in home values and partial decumulation of housing wealth. Since the introduction of the mandatory long-term care insurance, renovation probabilities of elder homeowners have been significantly increasing. (JEL codes: D12, J14, R21)