Homeowners aged 62 and older saw their collective housing wealth increase in Q3 2020 by 1.6% compared to the previous quarter. This constitutes an increase of approximately $121 billion to a record of $7.82 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.
The increase was reported Thursday 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 Q3 2020 to 280.99, 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 $149 billion) increase in the values of homes owned by seniors. This was offset, however, by a 1.6% (or $28 billion) increase of senior-held mortgage debt.
In relaying this information, NRMLA President Steve Irwin cites continued private-label product development on the part of the reverse mortgage industry as a component likely to expand the available offerings of home equity tapping options to qualifying seniors in order to meet their retirement needs.
“The reverse mortgage marketplace has greatly expanded over the past year to include more private-label products that offer consumers more options and greater flexibility compared to the FHA-insured Home Equity Conversion Mortgage,” Irwin said in the Q3 announcement. “While the HECM still accounts for over 90 percent of the market, we expect private-label reverse mortgage distribution channels to expand over time.”
Senior housing wealth topped $7 trillion for the first time ever according to a previous RMMI data release in March 2019. It then continued to increase, reaching $7.23 trillion in April 2020, $7.54 trillion in June and $7.70 trillion in October.
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.