RMMI shows decline in senior home values and home equityMortgagePress.comReverse Mortgage Market Index, senior home values, home equity
Consistent with current housing market conditions, the quarterly
Reverse Mortgage Market Index (RMMI) showed a decline in senior
home values and home equity held for the third quarter of 2007.
However, when compared year-over-year, Americans age 62 and over
still have a significant amount of wealth tied to their homes.
In the third quarter, seniors held $4.255 trillion of home
equity, down $25 billion from the second quarter of 2007, but still
above the $4.212 trillion held in the third quarter of 2006.
Furthermore, the combined value of homes owned by seniors declined
by $10 billion to $5.077 trillion, compared to $4.970 trillion in
the third quarter of 2006. The RMMI declined overall to 203.5 from
204.8.
"While the index, not surprisingly, reflects a quarterly decline
in home values and equity across most parts of the country, reverse
mortgages remain as popular as ever," said Peter H. Bell, president
of the National Reverse Mortgage
Lenders Association, which publishes the RMMI in conjunction
with Hollister Group LLC. During the most recent calendar year, the
Federal Housing Administration insured a record 132,252 reverse
mortgages, compared to 85,639 the year before.
"Seniors recognize the value of using reverse mortgages to
access the wealth they have accumulated in their homes to pay off
existing mortgages and other debts, pay for healthcare, make needed
repairs or to supplement retirement income," said Bell.
Reverse mortgages are becoming a more mainstream financial
planning tool for older homeowners. A reverse mortgage enables
homeowners, usually ages 62 and older, to convert part of the
equity in their home into income without having to sell it, give up
title or take on a new monthly mortgage payment. The reverse
mortgage is aptly named because the payment stream is "reversed."
Instead of making monthly payments to a lender, as with a regular
mortgage, a lender makes either one or more payments to the
borrower. The loan is repaid when the borrower moves from the
property.
For more information, visit www.nrmla.org.
