America's seniors saw the equity in their homes reach a total of $5.76 trillion by the end of the third quarter of 2015 – an increase of about $147 billion compared with the second quarter, according to the National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI).
The index reached an all-time high score of 200.19 in the third quarter, up from a score of 195.42 in the second quarter.
The increase in equity comes despite the fact that seniors were holding slightly more mortgage debt. According to the report, mortgage debt held by seniors increased slightly from $1.45 trillion to $1.46 trillion, but it wasn't enough to offset rising equity levels, which have climbed steadily for 18 consecutive quarters.
The primary driver of the increase in total equity was increasing home prices. NRMLA reports that it has revised the methodology used to arrive at the RMMI by including data from the 2013 American Community Survey and the Federal Reserve's Z.1 Release.
‘The recalibrated index uncovered something we didn't expect to see – which was that senior housing values outperformed the general population,’ says Peter Bell, president and CEO for NRMLA, in a release. ‘In metro areas hard hit by the Great Recession, for example, senior home values were more resilient to declines. It's great news for seniors who are considering tapping their housing wealth to support their retirement planning.’
The changes in methodology and data source updates resulted in a very significant 37% increase in the aggregate value of senior equity.
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