Homeowners who are 62-years-old and higher saw their home equity increase by a combined 2.4 percent to $6.42 trillion in the second quarter from $6.27 trillion in the first quarter, according to new data from the National Reverse Mortgage Lenders Association (NRMLA).
The new NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI)
is reporting the growth in housing wealth for retirement-aged homeowners was driven by an estimated 2.1 percent, or $162 billion, improvement in senior home values, which was offset by a 0.8 percent increase of senior-held mortgage debt that equaled $12 billion. The RMMI reached 230.17 in the second quarter, a new for the 17-year-old index.
However, NRMLA President and CEO Peter Bell questioned the political stalemate on the future of the Affordable Care Act will create uncertainty for this corner of the housing market.
“It is unclear whether Congress and the President will come to an agreement on healthcare reform this year, but there is little doubt that healthcare spending per person will continue to increase,” Bell said. “This is a particularly sobering fact for older Americans who can expect to spend between $200,000 to $400,000 out-of-pocket for medical expenses during retirement. The question for them right now is not whether the Senate Majority Leader can get the votes to pass a bill, but how are they going to pay for the financial shocks of aging? Housing wealth provides older homeowners with an available source of funds to manage the costs of caregiving and other expenses incurred in the last third of life.”