If Your House Is Worth This Amount, You're Doing Better Than The Average Retiree

Whichever way you look at it, lifestyle or finances, homes are very important retirement assets. According to Urban Institute's analysis of the Federal Reserve's 2022 Survey of Consumer Finances (SCF), home equity made up 47% of total net worth for white homeowners above the age of 62, 81% for Black homeowners in the same age group, and 89% for similarly aged Latine homeowners. These figures suggest that, for the average American retiree who owns a home, home equity likely accounts for around half of their net worth, if not considerably more. Therefore, having a home value that's more than the average retiree's provides a nice safety cushion and could put you far ahead of many retired Americans.

According to the SCF, the median home value for Americans aged 65 to 74 and 75+ was $320,000 and $286,000, respectively. So, owning a home that has crossed any of these thresholds is one of the clearer signs that you might be wealthier than the average retiree.

That said, home value is only a starting point. What matters more for retirement wealth is home equity — the portion of the home's value the owner actually holds after mortgage debt. Harvard's Joint Center for Housing Studies' analysis of the 2022 SCF found that homeowners age 65 and older had a median of $250,000 in home equity in 2022. So, while a home worth more than $320,000 or $286,000 may put you above the median home-value benchmark for retirement-age households, the stronger financial signal could be how much of that value you actually own.

Broader market forces like mortgage rates, local demand, insurance costs, and neighborhood trends can affect your home's value no matter what you do. That means a house worth more than the median retiree benchmark is partly a reflection of where it is, what buyers in that area are willing to pay, and how broader housing conditions are shaping prices. A retiree in a high-demand coastal market, for instance, may have a much more valuable home than someone with a similar-sized property in a slower or less expensive market.

Beyond market forces, the condition of the home itself can also affect where it falls against the retiree benchmark. A clean, well-maintained home with fresh paint, tidy landscaping, and a functional kitchen may hold its value better than an ill-maintained alternative. That doesn't mean you need to chase expensive renovations if your home is a bit dated; there are multiple affordable methods of raising your home's value. A higher project cost also does not automatically translate into a higher home value, since many home improvement projects do not recover their full cost. Modest updates — such as fixing clearly broken components, decluttering, replacing an old garage door, refreshing a kitchen backsplash, or updating faucets and cabinet hardware – can help a home present closer to its maximum market potential.