Senior housing wealth hits record high

Homeowners 62 and older saw their home equity rise to $6.82 trillion for the first quarter of 2018, up $177 billion since the fourth quarter of 2017, according to the National Reverse Mortgage Lenders Association’s NRMLA/RiskSpan Reverse Mortgage Market Index.

The first quarter hit an all-time high on the index, since its beginning in 2000, reaching 244.73, up from 238.38 in the fourth quarter of 2017. The index has continued its upward trend for the past 10 quarters. Thanks to home values increasing $182 billion (2.2 percent), increases in senior housing wealth also included a $5.4 billion increase (0.3 percent) in senior-held mortgage debt, according to the report. Senior mortgage debt rose to $1.58 trillion.

“The numbers tell a reassuring story about housing wealth in an era when large numbers of retirees and near-retirees fear running out of money before the end of their lives,” said NRMLA Executive Vice President Steve Irwin. “Homeowners 62 and older can responsibly tap some of the home equity they’ve built over to time to stabilize wobbly retirement stools and support their longevity. One way to do that is with a reverse mortgage, which is the only mortgage that was designed for older people who are either no longer working or transitioning out of the full-time workforce, and who want to stay in their own home for as long as possible.”

A study by the Joint Center for Housing Studies and Harvard University found that nearly 40 percent of aging homeowners have less than $50,000 in savings (not including their home equity), so senior housing wealth may help pave the way toward the retirement.