Senior Home Equity Falls 3% in Q1, Down 20% From Peak

Home equity for seniors ages 62 and older fell by $87.3 billion in the first quarter of 2011 to $3.21 trillion, ending up down 20% from its peak in the fourth quarter of 2006. The findings are based on the latest Reverse Mortgage Market Index, provided by RiskSpan and the National Reverse Mortgage Lenders Association.

The RiskSpan RMMI measures reverse mortgage market opportunity by determining the overall market size of seniors’ home equity. In the first quarter, the index showed a near-3% decrease to a 153.3 reading on the index scale.

The decline was driven by the renewed weakening of the housing market, according to RiskSpan, after an apparent stabilizing in 2010, housing prices in 360 of the 395 metropolitan statistical areas tracked by FHFA and RiskSpan fell in the first quarter of 2011. “Offsetting this decline in housing prices, mortgage debt levels fell for the 7th straight quarter to their lowest levels since Q2 2007,” wrote Allen Jones, RiskSpan CEO, in an email to RMD.


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The growth of the reverse mortgage market depends on the senior population growth, RiskSpan says, taking into account housing prices and senior debt levels. In its last report, RiskSpan noted through evaluations of U.S. census data, that the population of seniors aged 62 and over is projected to grow from its current level of 50 million to 83 million by 2030.

View the RiskSpan RMMI for Q1 2011.

Written by Elizabeth Ecker

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  • This article is confusing.  It provides little insight.
    How was home equity computed?  Was it simply an estimated aggregation of home equity of seniors both as of some unnamed date in the fourth quarter of 2006 and again on an unnamed date in the first quarter of 2011?  Were the human beings in the measurement the same or was it simply based on living seniors as of both dates?
    If the decline of 20% is based on all seniors living on both dates, the trend is far worse than indicated.  In that time period approximately 10 million seniors were added and a much smaller number lost due to death.  It hardly seems that the home equity lost by death would have exceeded the home equity gained by those “coming of age.”
    Any inferences taken from this data seems likely to be significantly wrong without more information about the population base and other relevant data.  The information provided is better suited to propaganda than meaningful findings.

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