SENIOR HOME EQUITY INCREASES FOR THIRD STRAIGHT QUARTER

29 Mar

From a press release by NRMLA on March 20, 2013:

“WASHINGTON, D.C. – Americans 62-years old and older now have more equity in their homes than at any time since mid-2009, according to data released today by the National Reverse Mortgage Lenders Association.
The new information comes from the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), which analyzes trends in the home values, home equity, and mortgage debt of homeowners 62 and older. The RMMI is updated quarterly and tracks back to the start of 2000.
“The positive trends supported by today’s RMMI are good news for senior homeowners, and they contain positive signs for the American economy and housing market,” said Peter Bell, president of the National Reverse Mortgage Lenders Association.
“Thankfully, the recovering real estate market continues to grow seniors’ home equity, creating a valuable resource for them. Tapping into that equity is one option to help fund living expenses, home maintenance costs, or health care needs in retirement,” Bell said. “With proper planning, seniors can use their home equity to pay off a forward mortgage and lower their monthly expenses, or they can use it for the financial flexibility needed to hold onto other assets during a down market.”
In the fourth quarter of 2012, the RMMI reached its highest level (152.59) since the second quarter of 2009. After falling to start 2012, the RMMI increased slightly in the second quarter before showing significant growth in the third and fourth quarters.
“In the second half of last year, the RMMI had its strongest two quarters of growth since early 2006,” said Allen Jones, managing director of RiskSpan, the analytics firm which designed and manages the RMMI. “Senior home equity increased by $50 billion between the third and fourth quarters of 2012, driven largely by the increase in the aggregate value of seniors’ homes.”
Over the last 12 months, the total home equity of homeowners 62 and older increased by $117 billion (+3.8 percent), while their home values increased by $97 billion (+2.3 percent) and their mortgage debt declined by $20 billion (-1.8 percent).”

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