An estimated $140.2 billion increase in the aggregate value of homes owned by seniors drove their share of home equity to $5.83 trillion and fueled the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) to an all-time high in Q4 2015 of 203.20 from 198.53 in Q3.
This information comes from data released by The National Reverse Mortgage Lenders Association, reporting that on a year-over-year basis, the index increased 8.1 percent in 2015, compared to an increase of 7.8 percent in 2014 and 17.5 percent in 2013.
“Significant gains in senior home equity are adding stability to the traditionally three-legged retirement funding stool of savings, social security, and pensions,” says NRMLA President and CEO Peter Bell. “For retirees leaving the workplace with a defined benefit plan, home equity is a fourth leg of the stool, available to tap when needed. For the millions of seniors without a pension, home equity is a valuable resource and can be an integral part of their retirement funding strategy.”
The Q4 senior equity value also represents a 16 percent increase from the pre-recession peak, when senior equity levels hit an estimated $5.04 trillion in Q4 2006. The RMMI in Q3 2015 was revised from 200.19 to 198.53 primarily due to the updated total housing value from Federal Reserve’s Z.1 release of historical data on March 10, 2016.
For more information, visit www.ReverseMortgage.org.