Homeowners aged 62 and over saw their collective real estate wealth increase by 3.7% in the second quarter of 2021 compared to the previous quarter. That is an increase of about $ 339 billion to a record $ 9.57 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) in conjunction with data analytics firm RiskSpan.
The increase was reported on Thursday in the NRMLA / RiskSpan Reverse Mortgage Market Index (RMMI) quarterly release, according to a press release from the NRMLA and an email update to association members.
The RMMI rose in the second quarter of 2021 to 334.71, which marks another consecutive all-time high since the index was originally released in 2000. This increase has been described as being mainly due to an estimated increase to 3.4 % (or $ 381 billion) of home value owned. by seniors. This was offset, however, by a 2.2% (or $ 42 billion) increase in first mortgage debt, a significant mitigating factor from the figure for the previous quarter.
“As the holidays approach, now is a great time for families to come together and take stock of their retirement resources and make the necessary adjustments to ensure continued financial security,” said Steve Irwin, President of the NRMLA in a press release. “Real estate must be considered along with other financial assets when developing a comprehensive retirement plan. “
Year over year, the RMMI figure grew 8.3% in 2020, surpassing previous change years including 2019 (5.4%) and 2018 (6.3%), which would be due to the higher levels of home price appreciation seen in 2020. NRMLA President Steve Irwin pointed out that the increase in the value of homes owned by seniors could make a reverse mortgage option that deserves further consideration, according to a quarterly RMMI release in April.
In July, the collective wealth figure for senior housing exceeded $ 9 trillion for the first time. The aforementioned April version saw the figure surpass $ 8 trillion for the first time. Previously, it exceeded $ 7 trillion for the first time according to a previous release of RMMI data in March 2019. It then continued to rise, reaching $ 7.23 trillion in April 2020, $ 7.54 trillion in June, $ 7.70 billion in October and $ 7.82 trillion in January 2021.
While the year-over-year increase in 2020 is an improvement, it did not quite match the 8.4% increase recorded in 2017, but slightly exceeded the increase in 8.2% in 2016.