Senior-held home equity rises in Q2 to $12.7 trillion

The figure is a recovery of roughly $820 billion after total senior-held home equity fell in both Q4 2022 and Q1 2023

After falling for two consecutive quarters, senior-held home equity bounced back by $820 billion in Q2 2023 to $12.7 trillion. This is according to the Reverse Mortgage Market Index (RMMI), the latest such release from the National Reverse Mortgage Lenders Association (NRMLA) and data analytics firm RiskSpan.

The RMMI recovered to 444.16 in Q2 from 406.52 the prior quarter, getting closer to its historic Q2 2022 peak which saw senior-held equity reach a collective level of nearly $15 trillion. Mortgage debt for the cohort also surged to $2.3 trillion, serving as an offset to the total.

According to RiskSpan, a “parallel trend” can be observed when looking at the S&P’s National Home Price Index. That metric similarly reached an all-time high in mid-2022 before experiencing a decline until this past January. That index has also seen a recovery over the past several months, RiskSpan noted.

Ongoing economic challenges and the increasing predictions of some economists regarding a recession punctuate the positivity of news regarding rebounded senior-held equity levels according to Steve Irwin, president of NRMLA.

“Inflation is still a concern and some economists are still predicting a possible mini-recession in 2024, so this is welcome news to see home equity levels are rebounding somewhat,” Irwin said in a statement. “The strategic use of home equity can play an important role in helping to offset the impact of these economically challenging times and is something that every homeowner should consider when developing or updating their retirement plan.”

The RMMI has risen precipitously between 2011 and 2021. When it endured a decline in 2011, the collective figure sat at roughly $3 trillion while in Q3 2021, the RMMI index rose by 4%, topping $10 trillion for the first time. The index grew by 3.98% in Q4 2021 and 4.91% during Q1 2022 — when it first topped $11 trillion. In Q2 2022, the RMMI grew by 4.10% to $11.5 trillion.

The collective senior housing wealth figure reached a threshold of over $9 trillion for the first time in July 2021, and $8 trillion for the first time in April 2021. It had previously topped $7 trillion for the first time in March 2019.

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