Homeowners 62 and older experienced a 1.4 percent growth in their housing wealth, or $98 billion, from the third quarter of 2018 to the fourth quarter, resulting in a record high of $7.05 trillion, according to the National Reverse Mortgage Lenders Association (NRMLA) in its latest NRLMA/RiskSpan Reverse Mortgage Market Index (RMMI) data.
The fourth quarter RMMI reached 254.10, a new peak for the index, which was first published in 2000. NRLMA credited this homeowner wealth spike to an estimated 1.3 percent or $110 billion increase in senior home values and offset by a 0.7 percent or $11.7 billion increase of senior-held mortgage debt.
However, on a year-over-year measurement, the RMMI increased by 6.5 percent in 2018, compared to 8.4 percent in 2017 and 8.2 percent in 2016. NRMLA attributed this to lower home price appreciation rates.
“Despite slower home price appreciation, we ended 2018 on a high note,” said Steve Irwin, Executive Vice President. “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. 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.”