Senior Home Equity Surpasses Record-High $10.6 Trillion

According to the latest quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index, homeowners 62 years and older saw their housing wealth grow by nearly 4% —or $405 billion— in Q4 to a record $10.6 trillion from Q3 2021.

The NRMLA/RiskSpan Reverse Mortgage Market Index (RMMI) rose in Q4 of 2021 to 370.56, another all-time high from when the index was first published in 2000. The increase in older homeowners' wealth was mainly driven by an approximately 3.7% —or $452 billion— increase in home values, offset by a 2.3%, or otherwise estimated $47 billion increase in senior-held mortgage debt.

The average home equity for a senior homeowner aged 65 years or older was $143,500 in 2019. According to the U.S. Census, nearly 80% of seniors 65+ owned their homes in 2020, and spent an average of $17,500 annually in housing-related expenses.

In just a few days, we'll be celebrating Older Americans Month, and the theme will be Age My Way,” said NRMLA President Steve Irwin. “To help ameliorate the risks and concerns surrounding the ability of homeowners to age their way, it is critical that housing wealth is carefully and responsibly considered when developing a comprehensive retirement plan. For many, housing wealth is indeed their greatest asset, and tapping that equity, under the right circumstances, will enable a secure path to aging security.

Reverse mortgages are available to homeowners who are 62 and older with significant home equity. They have been deemed a versatile financial tool that seniors can use to borrow against the equity in their home without having to make monthly principal or interest payments as with a traditional "forward" mortgage or a home equity loan. Under a reverse mortgage, funds are advanced to the borrower and interest accrues, but the outstanding balance is not due until the last borrower leaves the home, sells or passes away.