The total amount of home equity held by U.S. seniors is on the upswing, according to the latest data from the RiskSpan Reverse Mortgage Market Index (RMMI), a quarterly measure of home equity for people who are aged 65+.
The home equity total rose $46 billion in the third quarter of 2011, data released on Wednesday by the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan shows.
In the third quarter of 2011, senior home equity increased 1.5% to 152.0, for a total of $3.19 trillion of available home equity, the NRMLA/RMMI report says. That home equity, through sale or the use of a reverse mortgage, is a key to funding long term care, the study commissioners indicate.
“This data further demonstrates that the home must be considered as part of the funding longevity equation. Reverse mortgages are a creative tool to help seniors better use the assets they have to safely fund retirement,” said Peter Bell, President and CEO of NRMLA, in a statement.
In the third quarter, housing prices in nearly 70% of the 295 metropolitan statistical areas tracked by the Federal Housing Finance Agency and RiskSpan posted positive quarter-over-quarter growth, nudging aggregate senior housing values up 1% to $4.2 trillion, according to NRMLA.
Meanwhile, senior mortgage debt levels fell for the 10th quarter in a row, standing at $1.02 trillion and leaving seniors with $3.19 trillion in equity.
“The home is, by far, the largest financial asset most families have for use in retirement,” Bell said. “Reverse mortgages have evolved from a circumstance-based product to an accepted forward looking tool used for financial planning.”
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Written by Alyssa Gerace