Senior home equity reported a $83.5 billion surge in the fourth quarter of 2013, bringing the total value closer to its 2006 peak level of $4 trillion, according to the latest Reverse Mortgage Market Index (RMMI).
The increase resulted from an estimated $84.1 billion hike in the aggregate value of senior housing, but was slightly offset by a $600 million increase in mortgage debt held by seniors, according to the RMMI data released by the National Reverse Mortgage Lenders Association and RiskSpan.
As of the fourth quarter, senior home equity totaled approximately $3.54 trillion—an 2.41% increase compared to the previous quarter and the seventh consecutive quarter where the RMMI has risen.
While total senior home equity continues show marked progress as it edges closer to earlier highs, it is still 12% lower than $4 trillion peak experienced in the fourth quarter of 2006.
RMMI estimates the value of senior home equity based on the Federal Housing Finance Agency’s fourth quarter 2013 all-transactions indices, which reported home price increases in 63% of the 412 metropolitan statistical areas covered by RiskSpan.
Written by Jason Oliva