The housing wealth of homeowners aged 62 and over grew by 1.4%, or $98 billion in the fourth quarter of 2018. This results in a record-total housing wealth level of $7.05 trillion, according to the National Reverse Mortgage Lenders Association’s (NRMLA) quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI).
The index rose to 254.10 in Q4 – the highest level since it was established in 2000.
NRMLA said the increase was largely driven by an uptick in senior home values, which rose an estimated 1.3%, and that the growth was offset by a 0.7% increase in senior-held mortgage debt.
Year over year, the index revealed that senior housing wealth grew 6.5% in Q4 2018. This is less than the 8.4% annual rate of growth seen in 2017, and the 8.2% annual growth in 2016, which NRMLA attributes to a nationwide slowdown in home price appreciation.
“Despite slower home price appreciation, we ended 2018 on a high note. The RMMI increased for the 31st consecutive quarter, there are now 23.9 million senior homeowners – the highest number ever – and these homeowners hold a record $7.05 trillion in home equity,” said NRMLA Executive VP Steve Irwin. “For many retirees, a reverse mortgage offers the perfect solution to extract this home equity and put it to good use, so that they can live more financially secure lives.”