Homeowners aged 62 and older saw their collective housing wealth increase in Q2 2021 by 3.7% compared to the previous quarter. This constitutes an increase of approximately $339 billion to a record of $9.57 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), according to a press release by NRMLA and an email update to the association’s membership.
The RMMI rose in Q2 2021 to 334.71, 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 3.4% (or $381 billion) increase in the values of homes owned by seniors. This was offset, however, by a 2.2% (or $42 billion) increase of senior-held mortgage debt, a sizable mitigating factor when compared to the figure seen in the prior quarter.
“As the holidays approach, it’s the perfect time for families to gather and take stock of their retirement resources and make necessary adjustments to ensure continued financial security,” said Steve Irwin, president of NRMLA in a statement. “Housing wealth should be considered with other financial assets when developing a comprehensive retirement plan.”
Year-over-year, the RMMI figure increased by 8.3% in 2020, outpacing previous years of change including 2019 (5.4%) and 2018 (6.3%), which is believed to be due to higher levels of home price appreciation seen in 2020. NRMLA President Steve Irwin emphasized that the increased value of homes owned by seniors could make a reverse mortgage option worth new consideration, according to a quarterly release of the RMMI in April.
In July, the collective senior housing wealth figure topped $9 trillion for the first time. The aforementioned April release saw the figure top $8 trillion for the first time. Previously, it 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, $7.70 trillion in October and $7.82 trillion in January, 2021.
While 2020’s year-over-year increase is an improvement, it did not quite manage to match the 8.4% increase recorded in 2017, but did slightly best the 8.2% increase in 2016.