Homeowners who were 62 and older enjoyed a 1.6% increase in their housing wealth during the third quarter of 2020, according to the new data report from the National Reverse Mortgage Lenders Association (NRMLA)/RiskSpan Reverse Mortgage Market Index (RMMI).
During the third quarter, the RMMI determine that seniors’ housing wealth increased by $121 billion from the second quarter to hit a new record of $7.82 trillion. The RMMI rose during the third quarter to 280.99, its highest level in the 20-year history of the index.
The NRMLA primarily attributed this increase in senior homeowner's wealth to an estimated $149 billion quarterly increase in senior home values, a 1.6% uptick, which was offset by a 1.6% or $28 billion increase in senior-held mortgage debt.
“The reverse mortgage marketplace has greatly expanded over the past year to include more private-label products that offer consumers more options and greater flexibility compared to the FHA-insured Home Equity Conversion Mortgage,” said NRMLA President Steve Irwin. “While the HECM still accounts for over 90% of the market, we expect private-label reverse mortgage distribution channels to expand over time.”
The new RMMI numbers follows a data report from earlier this week by Reverse Market Insight (RMI) that found Home Equity Conversion Mortgage (HECM) endorsements were up 15.1% year-over-year in December to 4,097 loans. For the calendar year 2020, HECM volume recorded an annualized increase of 37.5% to 44,661 loans. Eight of the 10 regions tracked by RMI recorded strong growth during December, led by New England’s 59.5% upswing to 118 loans, the Rocky Mountain region’s 28.9% rise and the Northwest/Alaska region’s 18.7% increase.
Also this week, data compiled by New View Advisors showed that HECM-backed securities (HMBS) issuances reached $1.2 billion for December and ended 2020 at $10.6 billion in total issuance. The record level for these issuances is the $10.8 billion mark set in 2018.