U.S. Seniors Achieve Highest Home Equity Since 2008
Reverse mortgage group tracking shows seniors paying
off more of home equity
30, 2014 - Americans 62 years old and older now have more equity in
their homes than at any time since early 2008, according to a quarterly
measurement by the National Reverse Mortgage Lenders Association (NRMLA).
The NRMLAs quarterly measure that analyzes trends in home values, home
equity, and mortgage debt of homeowners 62 and older, has reached
178.91, its highest level since Q4 2007.
This RiskSpan Reverse Mortgage Market Index (RMMI)
is updated quarterly and began in 2000.
The RMMI tracking shows collective home equity of
Americans 62 and older has grown by more than 22 percent since Q2 was
the largest quarterly increase in equity since Q3 2005. The households
of American seniors now have paid 77 percent of equity in their homes.
Mortgage debt held by Americans 62 and older stands
at $1.08 trillion, a figure which has held steady over the past three
quarters. Senior mortgage debt peaked at $1.143 trillion in the fourth
quarter of 2009.
In the second quarter of 2014, the RMMI reached
178.91. The index has risen for nine consecutive quarters. The senior
housing value estimate is based on the Federal Housing Finance Agencys
Q2 2014 all-transactions Indices.
Reverse Mortgage Market Index
Sr. home Value ($T)
Senior Mortgage Debt ($T)
Sr. home Equity ($T)
Prepared by RiskSpan, Inc.; Data sources: American Community Survey,
Census, FHFA, Federal Reserve
About Reverse Mortgages
Reverse mortgages are available to homeowners 62
years old and older with significant home equity. They are designed to
enable retirees to borrow against the equity in their homes without
having to make monthly payments as is required with a traditional
"forward" mortgage or home equity loan.
Under a reverse mortgage, funds are advanced to the
borrower and interest accrues, but the outstanding balance is not due
until the last borrower leaves the home, sells, or passes away.
Borrowers may draw down funds as a lump sum at loan origination,
establish a line of credit or request fixed monthly payments for as long
as they continue to live in the home.
To date, more than 870,000 senior households have
utilized an FHA-insured reverse mortgage. More than 575,000 senior
households are currently using a reverse mortgage to help meet their
About the National Reverse Mortgage Lenders
The National Reverse Mortgage Lenders Association (NRMLA)
reports it is a membership organization comprised of more than 300
companies and more than 1,400 people participating in the reverse
mortgage industry. With a membership responsible for more than 90
percent of reverse mortgage transactions in the United States, NRMLA
serves as the national voice for the industry.
It serves as an educational resource, policy
advocate and public affairs center for lenders and related
professionals. NRMLA was established in 1997 to enhance the
professionalism of the reverse mortgage business. All NRMLA member
companies commit themselves to our Code of Ethics & Professional
Responsibility. For more information, visit www.ReverseMortgage.org
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