Seniors Weather Economy With Higher Equity
September 24, 2015
An index that measures home values, home equity, and mortgage debt for home owners 62 and older surged to an all-time high in the second quarter of this year, surpassing a prior record in the fourth quarter of 2006.
Where the Old-Timers Are
The National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index reached a record high of 195.29 in the second quarter of this year compared to the previous high of 192.03 in 2006. On a quarter-to-quarter basis, senior home equity has increased by $117.1 billion.
"The strong gains in housing wealth among America's seniors are an encouraging economic indicator for the millions of boomers who weathered the recession on the cusp of their retirement years," says NRMLA President Peter Bell. "The home equity they've worked so hard to build up can serve as a valuable financial management tool for years to come."
According to the index, the increase in senior home equity compared to the first quarter was driven by an estimated $122.8 billion rise in the aggregate value of senior housing, which helped to offset a $5.7 billion increase in senior-held mortgage debt.
The second quarter marked the thirteenth consecutive quarter for index rises. An estimated $4.08 trillion in the aggregate value of senior home equity represents a 38 percent recovery from the post-Recession trough in the second quarter of 2011, when senior equity levels had dropped to an estimated $3 trillion, according to NRMLA.
Updated: June 18, 2018