American homeowners aged 62 and older controlled $6.5 trillion in home equity during the third quarter of 2017, according to the most recent estimate from the National Reverse Mortgage Lenders Association.
That’s a jump of 1.9%, or $121 billion, from last quarter, NRMLA and data analytics firm RiskSpan reported.
“Housing wealth continues to be a reliable source of economic security for retirement-aged adults,” NRMLA president and CEO Peter Bell said in a statement announcing the results. “This is as true for people who want to stay in their own homes as it is for those who are ready to sell their property in order to access the equity they have built up over time.”
The trade group and the Arlington, Va.-based RiskSpan release a quarterly report on senior home equity, expressed both in dollars and their proprietary Reverse Mortgage Market Index (RMMI). That metric indexes home equity — defined as cumulative home value minus debt — against a baseline figure set in March 2000, the first year the index was calculated.
In the third quarter, the RMMI sat at 233.8, the most recent in a string of all-time highs. Home values have been steadily increasing, according to quarterly reports from real estate research firm CoreLogic — through October, home prices were riding 7% higher than they were at the same point last year, with analysts blaming a lack of supply and still-hot demand.
The NRMLA/RiskSpan numbers have consistently been far above the Urban Institute’s estimate from earlier this year, which pegged senior home equity at $3.6 trillion when adjusting for lending limits and other variables; however, that figure also only considered homeowners aged 65 and older.
Written by Alex Spanko