Senior Housing Wealth Reaches Record High of $7.19 Trillion

Homeowners age 62 and older saw their collective housing wealth increase in Q3 2019 by 0.3% compared to the previous quarter. This constitutes an increase of approximately $24 billion to a record of $7.19 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.

The increase was reported Tuesday in the quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI).

The RMMI rose in Q3 2019 to 259.19, which marks another consecutive all-time high since the index’s original publication in 2000. That increase was described as being primarily driven by an estimated 0.5% (or $40.7 billion) increase in the values of homes owned by seniors.

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This was offset, however, by a 1% (or $16.5 billion) increase of senior-held mortgage debt.

“Research suggests that as we age, Americans will spend more of our hard-earned retirement assets on health care, such as insurance, prescription drugs, in-home care and other services that help us remain independent,” said NRMLA President Steve Irwin in a press release announcing the new record. “A retirement plan that includes the responsible use of home equity may be the best option that can help ensure healthcare spending doesn’t become a financial burden for many retired couples.”

Senior housing wealth topped $7 trillion for the first time ever according to a previous RMMI data release in March 2019, before hitting a new threshold of $7.17 trillion the following October.

The RMMI also previously recorded a year-over-year increase of 6.5 percent in 2018, lower than the 8.4 percent increase recorded in 2017 and the 8.2 percent increase in 2016.

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  • That is quite the increase! This should mean opportunities for all of us in the reverse mortgage space. No, this does not mean seniors are going to come knocking on our doors begging us to do something with all their home equity, on the contrary!

    What this does mean is that we have a large pool of good solid prospects to go after. We will need to do do a lot of research to locate these homeowners along with the statistics we need to intelligently reach out to them. As you know, there are many sources out there that contain this information, but it takes time and effort on the part of all of us to be successful at it.

    John A. Smaldone
    http://www.hanover-financial.com

  • This is without doubt good news but we have seen this type of news for several years with no correlation to the volume of HECM endorsements. We have also seen very significant increases in seniors and those who own homes. Finally, the HECM has more consumer safeguards than ever before. So why is HECM activity only increasing in the category of HECM refis? Few have much faith that the increased level of Case Number Assignments for HECM refis will continue through fiscal 2021 without substantial reduction.

    Right now we have more proprietary mortgage mortgage (PRM) products than at any time since early 2008. Still there is no reliable entity reporting monthly PRM closings. For months we have been hearing that if that is done, too much proprietary data critical will be exposed to competitors. Yet the radio industry has its revenue report and no one is so overly concerned about competitors getting some kind of secret based on that data. I would strongly recommend that the industry looks into that report to see how it might be tweaked to provide an acceptable format for providing a monthly report for the industry.

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