Home equity levels for homeowners aged 62 and older grew by 2.8 percent in the fourth quarter of 2016 to $170.7 billion, boosting their total housing wealth to $6.2 trillion.
The growth in home equity, coupled with a 2.4 percent increase in home values for the same age group, drove the NRMLA/RiskSpan Reverse Mortgage Market Index to a new all-time high of 221.75. The RMMI is a quarterly measure that analyzes trends in home values, home equity and mortgage debt held by homeowners aged 62 and older dating back to 2000.
On a year-over-year basis, the RMMI index rose by 9.0 percent in 2016, compared to an increase of 8.6 percent in 2015 and 8.0 percent in 2014.
“The strong RMMI in the fourth quarter of last year shows that home equity continues to be a valuable asset for homeowners 62 and older,” said NRMLA President and CEO Peter Bell. “It’s time for consumers to study what it means to have home equity and to learn about its strategic uses, including how it can be used to support retirement goals,” said Bell.
To help explain home equity and its uses, NRMLA recently released its “Learn About Home Equity“ infographic, and the three-part article, “An Introduction to Housing Wealth: What is home equity and how can it be used?,” which are available on NRMLA’s consumer education website www.reversemortgage.org/HomeEquity.