In the last several years, the amount of equity that American seniors retain in their homes has grown to be huge.
The figure is quite stunning at $5.76 Trillion dollars!
Yes, you read that correctly.
And I suspect that it will continue to increase as more people turn age 62 and still own a home.
This amount of equity will certainly be a very important component for this age group to retire and pay for any services they may need as they age.
Far too many people are unprepared to retire and most of them are drastically underfunded to even consider it.
Obviously using a Reverse loan to access one’s equity will increase in the coming years.
Here is an article that discusses this news.
U.S. Seniors’ Home Equity Rockets to $5.76 Trillion
Posted By Jason Oliva On December 27, 2015
“Seniors’ home equity hit a $147 billion growth spurt in the third quarter of 2015, continuing its steady climb for the eighteenth consecutive quarter, according to recent readings from the National Reverse Mortgage Lenders Association/RiskSpan Reverse Mortgage Market Index (RMMI).
In total, the $147 billion increase in the aggregate value of homes owned by seniors rocketed their share of home equity to $5.76 trillion, propelling the RMMI to a new all-time high in the third quarter of 2015 at 200.19.
The multi-billion growth in senior home equity builds on its momentum from the previous quarter, where a $122.8 billion increase contributed to $4.08 trillion of home equity held by seniors, in turn powering the RMMI to a then-record-high of 195.29.
Meanwhile, mortgage debt held by seniors rose slightly from $1.45 trillion to $1.46 trillion, though the gain barely made a dent in home equity levels, according to NRMLA/RiskSpan.
To estimate the value of aggregate senior home equity, the RMMI numbers for the third quarter are based on a revised methodology that includes data from the 2013 American Community Survey and the Federal Reserve’s Z.1 release.
The recalibrated index uncovered something NRMLA/RiskSpan did not expect to see, which was that senior housing values outperformed the general population, said NRMLA President and CEO Peter Bell.
“In metro areas hard hit by the Great Recession, for example, senior home values were more resilient to declines,” Bell said in a written statement. “It’s great news for seniors who are considering tapping their housing wealth to support their retirement planning.”
The methodology changes and data source updates resulted in a 37% increase in the aggregate value of senior home equity.