Homeowners aged 62 and older saw their collective housing wealth increase in Q3 2021 by 4% compared to the previous quarter. This constitutes an increase of approximately $396 billion to a record of $10.19 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.
The increase was reported Thursday in the quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), according to an email update distributed to the association’s membership.
The RMMI rose in Q3 2021 to 356.37, which marks another consecutive all-time high since the index’s original publication in 2000. That increase was described as being primarily driven by an estimated 3.7% (or $440 billion) increase in the values of homes owned by seniors. This was offset, however, by a 2.2% (or $44 billion) increase of senior-held mortgage debt, a mitigating factor very close to the one seen in the prior quarter.
“Survey after survey has shown that one of our biggest fears is running out of money in retirement and having to subsist solely on Social Security,” said Steve Irwin, president of NRMLA in a statement accompanying the latest release. “That’s why housing wealth should be considered with other financial assets when developing a comprehensive retirement plan.”
Year-over-year, the RMMI figure increased by 8.3% in 2020, outpacing previous years of change including 2019 (5.4%) and 2018 (6.3%), which is believed to be due to higher levels of home price appreciation seen in 2020. The next data release in a few months’ time should give insight into the total growth of the RMMI figure in 2021.
Last July, the collective senior housing wealth figure topped $9 trillion for the first time. It reached a threshold of over $8 trillion for the first time in April 2021, and previously topped $7 trillion for the first time in March 2019.
While 2020’s year-over-year increase is an improvement, it did not quite manage to match the 8.4% increase recorded in 2017, but did slightly best the 8.2% increase in 2016.
Considering the high levels of home price appreciation in 2021 which was a major factor in improving the status of the Home Equity Conversion Mortgage (HECM) book of business inside the Mutual Mortgage Insurance (MMI) Fund late last year, the next release and full 2021 data should be anticipated with great interest.
