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Senior Home Equity Boomed in Q3

Senior citizens are in a great position in the real estate market at the moment as the latest research shows that their housing wealth grew $396.1 billion to $10.1 trillion during the third quarter of 2021, largely mirroring the meteoric growth seen by the market as a whole. 

The data for this comes from the latest iteration of the National Reverse Mortgage Lenders Association (NRMLA) and RiskSpan’s Reverse Mortgage Market Index and covers homeowners 62-years-old and over. 

Currently, the index stands at 356.37 points, an all-time high not seen since the index was first published in the year 2000, which now accounts for a total of $10.1 trillion in value. This increase in older homeowners' real estate wealth was mainly driven by an estimated 3.7% increase—or $440 billion—in home values, but was offset by a 2.2% or $44 billion increase in senior-held mortgage debt. 

"One of the biggest fears that workers and retirees have is running out of money in retirement and having to subsist solely on Social Security," said Steve Irwin, President of NRMLA. "That's why housing wealth should be considered with other financial assets when developing a comprehensive retirement plan." 

As a standard, reverse mortgages are available to homeowners who are 62 and older with significant home equity. The NRMLA states that 1.21 million households have taken out an FHA-insured reverse mortgage to help meet their unique financial needs. 

Last July, a study conducted by American Advisors Group (AAG), a home equity solutions company, broke down, by region, the way seniors are utilizing reverse mortgage and revealed that Californians lead the country. 

AAG's Chief Marketing Officer Martin Lenoir noted that California historically has been a popular market for reverse mortgages, but he said AAG's research is finding increased adoption in many more states such as Colorado and Utah. 

"Seniors throughout the country are taking advantage of the strong housing market and tapping into their home equity to create financial flexibility," Lenoir said. "Seniors are realizing that their growing home equity is one of their greatest assets and that now is the time to utilize it." 

About Author: Kyle G. Horst

Kyle G. Horst is a reporter for DS News and MReport. A graduate of the University of Texas at Tyler, he has worked for a number of daily, weekly, and monthly publications in South Dakota and Texas. With more than 10 years of experience in community journalism, he has won a number of state, national, and international awards for his writing and photography including best newspaper design by the Associated Press Managing Editors Group and the international iPhone photographer of the year by the iPhone Photography Awards. He most recently worked as editor of Community Impact Newspaper covering a number of Dallas-Ft. Worth communities on a hyperlocal level. Contact Kyle G. at kyle.horst@thefivestar.com.

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