American seniors now have more home equity than any time seen since mid-2009, reports the National Reverse Mortgage Lenders Association (NRMLA).
Home equity totalled $3.2 trillion for adults age 62 and older during the fourth quarter of 2012, marking the third straight increase on a quarterly basis, according to the NRMLA/Risk Span Reverse Mortgage Market Index (RMMI).
“The positive trends supported by today’s RMMI are good news for senior homeowners, and they contain positive signs for the American economy and housing market,” said Peter Bell, president of the National Reverse Mortgage Lenders Association.
In the fourth quarter, the RMMI reached its highest level of 152.59 since the second quarter of 2009. After falling 0.60% to start the year, the RMMI increased slightly in the second quarter before posting significant growth for the third and fourth quarters.
“In the second half of last year, the RMMI had its strongest two quarters of growth since early 2006,” said Allen Jones, managing director of RiskSpan, the analytics firm which designed and manages the RMMI.
Over the last 12 months, the total home equity of seniors age 62 and oder increased by $117 billion, up 3.8%. This period also saw seniors’ home values increase by $97 billion (2.3%) as well as mortgage debt decline by $20 billion (1.8%).
“The equity Americans have built in their homes is often their greatest asset, an important option for funding their future,” Bell said. “The FHA Home Equity Conversion – or reverse mortgage – program has been a useful tool, helping hundreds of thousands of seniors maintain their homes and lead more financially stable lives.”
Written by Jason Oliva