SENIOR HOME EQUITY REMAINS GREATER THAN $3 TRILLION

Oct 5, 2011, 9:08 a.m.

An estimate of senior home equity owned by Americans aged 62 and over stood at $3.14 trillion as of the end of the second quarter in 2011.

The $3.14 trillion equity level is measured by the National Reverse Mortgage Lenders Association (NRMLA) / RiskSpan Reverse Mortgage Market Index (RMMI) and was released today. The index tracks the reverse mortgage market opportunity by analyzing and reporting on trends in senior home values and senior home equity levels.

The RMMI continued its slide in the second quarter of 2011, falling by 2% to 149.9, its lowest level since Q2 2004. In the second quarter, housing prices in 340 of the 395 MSAs (including the ten largest) tracked by FHFA and RiskSpan saw quarter-over-quarter declines, sending aggregate senior housing values down 1.6% to $4.16 trillion.

Senior mortgage debt levels fell for the 9th straight quarter to $1.02 trillion, leaving seniors with $3.14 trillion in equity, a level $63 billion lower than in the first quarter.

Peter Bell, President of NRMLA, noted that the data demonstrates how the housing market has impacted the value of senior equity versus the equity level of the over-all population: “While the senior equity level is 22% off of its Q2 2006 peak, the equity level of the overall population is down 38% from its Q1 2006 peak.” Bell went on to point out that the difference is “due to the relatively fast growth and lower mortgage debt levels of the senior population.”

The NRMLA/RiskSpan RMMI is updated on a quarterly basis. The index reflects the current value of home equity owned by seniors relative to the level observed in Q1 2000, the index’s base period. The RMMI can be viewed at www.riskspan.com.

For more information about reverse mortgages visit the National Reverse Mortgage Lenders Association at www.reversemortgage.org.