Senior Home Equity on the Rise

By NRMLA, Special for  USDR

Housing wealth continues to grow for U.S. homeowners aged 62 and older, providing seniors with added financial security in their retirement years. That’s according to the National Reverse Mortgage Lenders Association, who reported today that the aggregate value of senior home equity reached $5.9 trillion in the second quarter of 2016, a gain that propelled the NRMLA/RiskSpan Reverse Mortgage Market Index to a new peak of 212.45 from 207.60 in Q1 and an 8.7 percent year-over-year  increase.

First published in Q1 2000, when senior home equity totaled $2.38 trillion, the RMMI was benchmarked at 85.47. The index initially peaked at 182.26 in Q1 2006 before declining through Q1 2009, when senior home equity dropped to a trough of $3.48 trillion and the index fell to  125.08.

Since that time, the housing recovery and growing population of senior homeowners have contributed to an upward trajectory for the RMMI. In Q2 2016, senior home values reached $7.4 trillion while senior-held mortgage debt increased by $10.75 billion to$1.48  trillion.

“Healthy improvements in the housing sector are creating more financial options for senior homeowners who want to stay in their home as long as possible but who may need to make structural modifications or coordinate care services to manage living there safely and independently,” said NRMLA President and CEO Peter  Bell.

According to Healthy Aging Begins at Home, a May 2016 report from the Bipartisan Policy Center’s Senior Health and Housing Task Force, most homes are not currently set up to meet the daily needs of aging residents. While a range of modifications and long-term support services are available to seniors, many are cost prohibitive for low- and middle-income households. Home health aide services, for instance, have a national median cost of $41,600 a year, while lowering countertops could cost between $1,650 – $4,000.

The BPC Task Force suggests that home equity, which can be accessed with a reverse mortgage among other financial instruments, offers owners a potential source of capital to cover necessary expenditures and enable them to age in  place.

“Incorporating home equity into a retirement funding stream with a reverse mortgage is not a new idea, but important new protections for borrowers have regenerated interest in this strategy, which can help more seniors afford the tools to live safely in their homes for a longer period of time,” said  Bell.

The RMMI in Q1 2016 was revised from 209.12 to 207.60 primarily because of the updated Fed total housing value in the third quarter  release.

About Reverse  Mortgages

Reverse mortgages are available to homeowners age 62 and older with significant home equity. They are a safe financial tool seniors can use to borrow against the equity in their home without having to make monthly payments as with a traditional “forward” mortgage or a 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.

To date, more than 983,000 senior households have utilized an FHA-insured reverse mortgage. More than 616,000 senior households are currently using a reverse mortgage to help meet their financial needs. For more information, please visit

About the National Reverse Mortgage Lenders  Association
The National Reverse Mortgage Lenders Association (NRMLA) is the national voice for the industry and represents the lenders, loan servicers, credit unions, and housing counseling agencies responsible for more than 90 percent of reverse mortgage transactions in the United States. All NRMLA member companies commit themselves to a Code of Ethics & Professional Responsibility. Learn more at  

SOURCE National Reverse Mortgage Lenders  Association

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.