Seniors’ home equity hit a $147 billion growth spurt in the third quarter of 2015, continuing its steady climb for the eighteenth consecutive quarter, according to recent readings from the National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index (RMMI).
In total, the $147 billion increase in the aggregate value of homes owned by seniors rocketed their share of home equity to $5.76 trillion, propelling the RMMI to a new all-time high in the third quarter of 2015 at 200.19.
The multi-billion growth in senior home equity builds on its momentum from the previous quarter, where a $122.8 billion increase contributed to $4.08 trillion of home equity held by seniors, in turn powering the RMMI to a then-record-high of 195.29.
Meanwhile, mortgage debt held by seniors rose slightly from $1.45 trillion to $1.46 trillion, though the gain barely made a dent in home equity levels, according to NRMLA/RiskSpan.
To estimate the value of aggregate senior home equity, the RMMI numbers for the third quarter are based on a revised methodology that includes data from the 2013 American Community Survey and the Federal Reserve’s Z.1 release.
The recalibrated index uncovered something NRMLA/RiskSpan did not expect to see, which was that senior housing values outperformed the general population, said NRMLA President and CEO Peter Bell.
“In metro areas hard hit by the Great Recession, for example, senior home values were more resilient to declines,” Bell said in a written statement. “It’s great news for seniors who are considering tapping their housing wealth to support their retirement planning.”
The methodology changes and data source updates resulted in a 37% increase in the aggregate value of senior home equity.
Written by Jason Oliva