Homeowners aged 62 or older saw their collective housing wealth increase in the third quarter of 2021 by 4% compared to the previous quarter. That’s an increase of about $396 billion to a record $10.19 trillion, according to data provided by the National Reverse Mortgage Lenders Association (NRMLA) jointly with data analytics firm RiskSpan.
The increase was reported Thursday in the quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI), according to an email update distributed to association members.
The RMMI rose in the third quarter of 2021 to 356.37, another consecutive highest ever since the original index was published in 2000. The increase has been described as primarily driven by an estimated 3.7% (or $440 billion) increase in the value of homes owned . by the elderly. However, that was offset by a 2.2% (or $44 billion) increase in mortgage debt, a mitigating factor very close to the factor seen in the previous quarter.
“Study after study has shown that one of our biggest concerns is running out of money in retirement and having to rely solely on Social Security,” Steve Irwin, president of NRMLA, said in a statement accompanying the latest release. “This is why housing wealth should be considered along with other financial assets when developing a comprehensive retirement plan.”
On an annualized basis, the RMMI figure increased by 8.3% in 2020, outpacing previous years of change including 2019 (5.4%) and 2018 (6.3%), which is believed to be due to the higher levels of house price increases seen in 2020 should The next data release in a few months should give an insight into the overall growth of the RMMI number in 2021.
Last July, the collective figure for large housing wealth exceeded $9 trillion for the first time. It reached a threshold of over $8 trillion for the first time in April 2021, and previously surpassed $7 trillion for the first time in March 2019.
Although the 2020 annual increase is an improvement, it didn’t quite match the 8.4% increase recorded in 2017, but it did the best 8.2% increase in 2016.
Given the high levels of home price hikes in 2021 that were a major factor in improving the case for the Mortgage Transfer Conversion (HECM) business book within the MMI fund late last year, the next release and the whole of 2021 data should be anticipated with great interest .