Senior home equity is continuing its upward march, with housing wealth reaching $6.9 trillion in the second quarter of 2018.
Equity for homeowners 62 and older grew $130 billion over the first quarter of 2018, according to the most recent figure from the National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index.
Reaching a new all-time high since its creation in 2000, the RRMI rose to 249.37 in Q2. This surpasses last quarter’s previous high of 244.73.
Data analysis firm RiskSpan determines the quarterly index by comparing the increase in senior home values against changes in senior mortgage debt. For the three months of Q2, seniors saw an increase of $143 billion — or 1.75% — in the values of their homes and a $12.8 billion — or 0.8% — rise in their mortgage debt.
These numbers, when compared with Americans’ bleak retirement savings, underscore the fact that the biggest chunk of wealth for most retirees is in their homes.
“If you consider that the typical retiree household might have one or two incomes from Social Security, a modest pension and/or limited income from low-yielding fixed-income instruments, and, perhaps, a diminished 401(k) account, then home equity becomes their greatest asset and an important resource for funding their future,” NRMLA president and CEO Peter Bell said in a statement about the latest numbers.
The RMMI data aligns with other recent analyses of home equity. Last week, CoreLogic released its Insights for Q2 2018, which showed a 12.3% jump — or $980.9 billion increase in equity — for all mortgaged residences since Q2 2017.
Written by Maggie Callahan