Senior housing wealth has reached $7.14 trillion, according to data from the National Reverse Mortgage Lenders Association (NRMLA). The quarterly NRMLA/RiskSpan Reverse Mortgage Market Index reported that homeowners 62 and older saw their housing wealth grow by 2.7% or $104 billion in Q1 2019, up to $7.14 trillion.
The index rose to 257.12 in Q1, an all time high since 2012. The NRMLA reports that the increase was driven mainly by an increase in home values, as seniors saw a $110 billion increase in their home’s values.
“Reverse mortgages have become an essential component for addressing a huge problem for many Americans—funding retirement,” said NRMLA President and CEO Peter Bell. “More than 1.12 million families have used a reverse mortgage alongside side their 401(k)s, IRAs, savings, investments, Social Security, Medicare and Medicaid to cover life’s daily expenses, so they could live more financially secure lives. As with all major financial decisions, a reverse mortgage should be part of an overall strategic plan, with input from knowledgeable professionals, and family members who may be impacted.”
As senior housing wealth increases, there may be more incentive to tap into that equity through a home equity conversion mortgage (HECM). Reverse Mortgage Daily reports that HECM endorsements rose 12.7% in April, reaching 2,899 loans, according to Reverse Market Insight (RMI).
The report added that retail endorsements grew at 6.5%, and wholesale growth increased by 21.2%.
“Strong Wholesale growth outpace[d] slower Retail results,” said RMI President John Lunde. “But both [channels are] contributing to a solid month of volume.”
Lunde added that this trend has been ongoing, but may lead to decreases in the near future.
“Wholesale has performed better than Retail volume the past four months on this report now, and is at 45% of the market in April,” Lunde said. “That market share is the highest it’s been in a year but seems more likely to recede a bit than continue increasing in the next few months given the prior 11 months were in a range of 36.8-41.8%, making this more of an anomaly so far.”
Seven of the top 10 lenders saw gains in April, as they outpaced the overall industry. Liberty increased 66.4% to its highest level since March 2018, Synergy One grew 19.7%, and One Reverse saw a 16% increase.