Homeowners aged 62 and older saw their collective housing wealth increase in Q2 2020 by 1.8% compared to the previous quarter. This constitutes an increase of approximately $134 billion to a record of $7.70 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.
The increase was reported Friday in the quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), circulated to NRMLA members in an association email.
The RMMI rose in Q2 2020 to 276.64, 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 1.6% (or $150 billion) increase in the values of homes owned by seniors. This was offset, however, by a 0.9% (or $15.5 billion) increase of senior-held mortgage debt.
The ongoing COVID-19 coronavirus pandemic continues to impact the financial well-being of American seniors by cutting them off from access to their retirement lifestyle, potentially necessitating an exploration of home equity tapping according to NRMLA President Steve Irwin.
“The most recent Risk Retirement Index published by the Center for Retirement Research at Boston College finds that 55 percent of working age households in America are now at risk of being unable to maintain their pre-retirement standard of living, due largely to the COVID-19 pandemic,” said Irwin in an announcement of the data. “The responsible use of home equity may be an option to help mitigate these potential risks and help seniors stay financially secure.”
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, $7.19 trillion in December, $7.23 trillion this past April and $7.54 trillion in June.
The RMMI also previously recorded a year-over-year increase of 6.5% in 2018, lower than the 8.4% increase recorded in 2017 and the 8.2% increase in 2016.