By multiple counts, the level of untapped home equity in the United States just keeps rising.
A pair of reports released this month show that the recent trend continues unabated, with real estate analysis firm CoreLogic reporting a 13.3% year-over-year gain among all Americans with mortgaged homes and the National Reverse Mortgage Lenders Association finding a 1.9% increase in home equity for seniors aged 62 and older.
“The numbers tell a reassuring story about housing wealth in an era when large numbers of retirees and near-retirees fear running out of money before the end of their lives,” NRMLA executive vice president Steve Irwin said in a statement announcing the group’s results. “Homeowners 62 and older can responsibly tap some of the home equity they’ve built over time to stabilize wobbly retirement stools and support their longevity.”
Each quarter, NRMLA and data modeling firm RiskSpan release the Reverse Mortgage Market Index, which measures senior home equity as defined by the difference between home values and mortgage debt held by Americans over the age of 62. In the first quarter of 2018, seniors saw their homes rise in value by $182 billion, or 2.2%, while their mortgage debt inched up 0.3%.
The index’s current value of 244.73 represents yet another all-time high since NRMLA and RiskSpan began calculating that value in 2000. Aside from declines during and immediately after the Great Recession, the index has been on a steady march upwards, hitting $6.8 trillion in the first quarter of the year.
Meanwhile, by CoreLogic’s reckoning, overall U.S. home equity ballooned by a little over $1 trillion over the last four quarters, a 13.3% gain over this time last year — which works out to about $16,300 per homeowner.
“Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity — the primary driver of home equity wealth creation,” CoreLogic chief economist Frank Nothaft said in a statement about the results.
Yet again, Western states led the way in equity gains, with California homeowners seeing a whopping $50,000 increase. Washington State followed close behind with $44,000 per homeowner, with Hawaii at $33,000.
“Home equity balances continue to grow across the nation,” CoreLogic CEO Frank Martell said. “In the far Western states, equity gains are fueled by a long run in home price escalation. With strong economic growth and higher purchase demand, we expect these trends to continue for the foreseeable future.”
Written by Alex SpankoPrint Article