Senior home equity rose to a record-high $3.34 trillion during the second quarter of 2013, according to the latest Reverse Mortgage Market Index (RMMI) from the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan.
The RMMI rose 3.1% during the second quarter to a level of 160.1, which NRMLA/RiskSpan notes as the highest level since the fourth quarter of 2008.
The increase of $101 billion during the period, driven by an estimated $98 billion increase in senior housing and a decline in mortgage debt held by seniors, was also the highest quarterly gain since 2005.
During the first quarter, senior home equity rose an estimated $50 billion. The second quarter of 2013 now marks the fifth consecutive quarter in which the RMMI has risen.
Despite the record-high increase in seniors’ home equity reported during the quarter, it remains below prior peak levels.
The $3.34 trillion estimated value of home equity by seniors during the second quarter is still 17% below its peak level of $4 trillion recorded during the fourth quarter of 2006, according to the RMMI.
The RMMI has tracked the reverse mortgage market since 2000 by analyzing and reporting trends in senior home values and home equity levels.
The senior housing value estimate is based on the Federal Housing Finance Agency’s second quarter of 2013 all-transactions indices, which saw housing values increase 73% of the 412 metropolitan statistical areas covered by RiskSpan.
Written by Jason Oliva