But unless, or until, this gain is realized or is extinguished by a fall in market price, it will remain on the asset side of the householder’s balance sheet, exposed to price change and uncertainty. Equity extraction through realized gains creates liquid funds with certain value. Indeed, a significant proportion of sellers do not purchase another home.
Washington: Board of Governors of the Federal Reserve System, January. Eggertsson, Gauti B., and Michael Woodford (2003). “The Zero Bound on Interest Rates and Optimal Monetary Policy,” Brookings Papers on Economic Activity, no. 1, pp. 139–211. Femia, Katherine, Steven Friedman, and Brian Sack (2013).