Senior housing wealth has hit a new record at $11.81 trillion

Senior-held equity continues to rise, though the pace has slowed along with national home price appreciation

Collective housing wealth rose once more in Q3 2022 for homeowners at or over the age of 62. However, the growth in housing wealth for seniors in the third quarter of last year was smaller than what it had been with recent increases, according to the Reverse Mortgage Market Index (RMMI).

The RMMI, released quarterly by the National Reverse Mortgage Lenders Association (NRMLA) and data analytics firm RiskSpan, showed that seniors’ collective housing wealth increased by 1.95% ($226 billion) in Q3 2022 compared to the prior quarter, hitting a record of $11.81 trillion.

This brings the RMMI to 413.22, an all-time high since the start of the index in 2000. Home price appreciation drove the increase, at roughly $268 billion, which was offset by a 1.93% (or $42 billion) increase in senior-held mortgage debt.

Slower RMMI growth

Steve Irwin, president of the National Reverse Mortgage Lenders Association (NRMLA)
Steve Irwin

NRMLA President Steve Irwin highlighted in a statement the unique retirement savings challenges faced by women, despite the fact that many senior women own their homes.

“Multiple studies published over the past year highlight the challenges faced by women to save for retirement because of competing priorities, such as caring for children or an aging parent or relative,” Irwin said. “Nevertheless, they own a substantial asset, their home. Therefore, when meeting with a financial planner, or another trusted advisor, it’s very important to consider home equity as a strategic asset that can be used to help enhance retirement security.”

While senior-held home equity and home price appreciation in the U.S. have generally continued to rise, growth has been softer in recent months when compared to 2021 and early 2022, as evidenced by the previous quarterly RMMI growth levels.

In Q3 2021, the RMMI index rose by 4%, topping $10 trillion for the first time, while in Q4 2021 the index grew by 3.98%. During Q1 2022, the RMMI grew by 4.91% — which is when it first topped $11 trillion. In Q2 2022, the RMMI grew by 4.10%.

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

Housing wealth growth slows

Appreciation is softening across the national housing market. According to recent data from CoreLogic, home price appreciation dropped to its lowest level in two years this past November.

“Year-over-year home price growth ended its 21-month streak of double-digit momentum in November, posting an 8.6% gain, the lowest rate of appreciation in exactly two years,” CoreLogic said. “Although 16 states bucked the national trend and saw annual double-digit increases, appreciation is decelerating in many popular housing markets across the country.”

Still, the losses were not as severe as they otherwise could have been due to the price gains that began 2022, according to Selma Hepp, deputy chief economist for CoreLogic.

“Although home price growth has been slowing rapidly and will continue to do so in 2023, strong gains in the first half of last year suggest that total 2022 appreciation was only slightly lower than that recorded in 2021,” Hepp said. “However, 2023 will present its own challenges, as consumers remain wary of both the housing market and the overall economic outlook.”

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