U.S. Seniors’ Home Equity Rockets to $5.76 Trillion

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

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  • There are several variables coming into play. One variable is a new segment of home equity from Baby Boomers being brought into the equation for the first time and a second variable comes from removal of home equity of those senior homeowners who passed away.

    For example, imagine if just looking at surviving seniors in the third quarter showed an overall loss in their home equity of $10 million and the home equity of those just becoming seniors in the third quarter had a positive $157 million in home equity; this would net to the same $147 million.

    While having this information is important so would having average home equity of all seniors at the end of each quarter be relevant and of greater help. Even better would be to have the home equity of just those who had become seniors in the quarter as of the end of the quarter along with the current information. I am not arguing for less information but rather more.

  • It would be helpful to see the historical graph of the RMMI, assuming it has also been adjusted to reflect the ” methodology changes and data source updates”.

    It is infrequent that such changes result in a nearly 40% change in such a measure.

  • I have been saying all along, with so many seniors turning 62 years of age, in record numbers mind you, along with as much equity in the hands of seniors, our opportunities are endless!

    I look at what my friends say in their comments, much of it you have to look at seriously. However, these statistics have been around for some time now, all of in the industry need to take a very positive attitude for 2016 and go out there and capitalize on all we have available to us.

    I feel Jason’s article could not have come out in a more timely manner!

    Happy New Year to everyone, 2016 should be better than 2015 was in many ways, let us all hope and pray that is the way it will turn out!

    John A. Smaldone

    This article is the expressed opinion of John A. Smaldone only and does not represent the opinion of Willow Bend Mortgage or its affiliates.

    • Hey John,

      Happy New Year to you as well.

      It is important for our colleagues to know what they are facing the remainder of this fiscal year for business plan purposes. While what is true of the industry as a whole is not necessarily indicative of what individual originators may do on their own production compared to last year, it is more true than not of the vast majority of us.

      There is absolutely nothing wrong with encouraging your colleagues to go out with the goal of improving their closings over last year. There is also nothing wrong with stating that predictions are just that and are not set in stone; however, in doing the latter, one should be able to point to some facts that would engender that kind of hope. Personally, that data is not to be found from any data provided by our most reliable sources, HUD/FHA or the US Census Bureau.

      After almost 30 million Baby Boomers have turned 62 as of 1/3/2016, where are we seeing any improvement in HECM endorsements from that source? Like generations before them, we may not anticipate much impact from these seniors participating in the HECM market for several years.

      By pure US birth stats, the number of seniors now over 62 are about 29.9 million. See http://www.bbhq.com/bomrstat.htm

      No doubt we have lost a significant number of these Baby Boomers (as of 1/3/2016) as expats or through death. HOWEVER, we have likely replaced all Baby Boomers who are either no longer living or have divested themselves of their US citizenship when looking at legal immigrants alone (but even more through illegal immigrants). This is why we say that 10,000 Baby Boomers are turning 62 daily. You can read about the immigrant phenomenon on the US Baby Boomer population at http://paa2015.princeton.edu/uploads/151342

      While we should exceed fiscal year 2015 endorsements within a year or so, it is less than probable we will see that occur this fiscal year. With a four month lag for the average HECM to go from case number assignment to endorsement, almost all endorsements for this fiscal year will have a case number assigned before June 1, 2016; that leaves us slightly less than five months to gain much traction towards meeting or exceeding total endorsements for fiscal 2015. So far Case Number Assignment data does not support a prediction of beating the fiscal year 2015 endorsement total in fiscal year 2016.

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