Older homeowners have amassed more home equity than ever before, thanks to just the right balance of factors occuring simultaneously.
Homeowners ages 62 and older saw their housing wealth increase by $600 billion in the first quarter of 2024, reaching $14 trillion, according to the latest quarterly release of the National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index.
“Senior home equity levels reached $14 trillion for the first time, which is an impressive milestone,” NRMLA President Steve Irwin said in a statement. “Housing wealth represents a critical, yet underutilized resource, that can provide greater financial security for America’s aging population.”
The report attributed the growth in senior home equity in part to an estimated 3.97% ($624.6 billion) increase in senior home values – offset by a 0.89% ($20.9 billion) increase in senior-held mortgage debt.
“Increasing house prices drove the index’s upward trend, mitigated to some extent by a corresponding modest increase in mortgage debt held by seniors,” it read.
U.S. mortgage borrowers of all ages saw their home equity increase 8% to a net total of $17.6 trillion in Q2 2024, according to another report from CoreLogic. That accounts for an average $25,000 increase in equity year-over-year.
A reverse mortgage can be a retirement planning tool for homeowners ages 62 and older. Those who qualify (in some states, the minimum age of eligibility is 55) can make improvements to their homes with equity they’ve built up. The goal for many older homeowners is to age in place, without burdening loved ones with any financial obligation upon their passing.
