An estimated $140.2 billion increase in the aggregate value of homes owned by U.S. seniors drove their share of home equity to $5.83 trillion in the fourth quarter of 2015, according to the National Reverse Mortgage Lenders Association (NRMLA), which says these numbers fueled the NRMLA/RiskSpan Reverse Mortgage Market Index to an all-time high index score in the fourth quarter of 2015.
Per the index, the level of equity reached an index score of 203.20 in the fourth quarter, surpassing the index score of 198.53 in the third quarter.
On a year-over-year basis, the index increased 8.1% in 2015 compared with an increase of 7.8% in 2014 and 17.5% in 2013.
“Significant gains in senior home equity are adding stability to the traditionally three-legged retirement funding stool of savings, social security and pensions,” says Peter Bell, NRMLA president and CEO. “For retirees leaving the workplace with a defined benefit plan, home equity is a fourth leg of the stool, available to tap when needed. For the millions of seniors without a pension, home equity is a valuable resource and can be an integral part of their retirement funding strategy.”
The fourth-quarter senior equity value also represents a 16% increase from the pre-recession peak, when senior equity levels hit an estimated $5.04 trillion in the fourth quarter of 2006.
