The surplus value of senior housing will decrease slightly in the third quarter of 2024
A decline in home values of 0.3% and a slight increase in mortgage debt held by seniors have resulted in the total amount of home equity held by seniors falling from an all-time high.
This is evident from the latest edition of the Reverse Mortgage Market Index (RMMI), a quarterly report compiled by the National Association of Reverse Mortgage Lenders (NRMLA) in partnership with data analytics company Risk span.
The new report states that stocks held by seniors peaked at $14.09 trillion in the second quarter of 2024, but fell to $14.01 trillion in the third quarter, causing the RMMI to drop from 489.70 to 489.37.
“The decline in seniors’ wealth was largely attributable to an estimated 0.3 percent (or $55 billion) decline in home values and a one percent (or $22.6 billion) increase in mortgage debt held by seniors ,” the report said.
NRMLA President Steve Irwin said January is a time for older homeowners to assess how they will handle their financial matters in the coming year.
“Housing equity represents a critical but underutilized resource that could provide greater financial security for America’s aging population,” Irwin said in a statement. “We encourage homeowners to at least consider tapping into their home equity when setting up a comprehensive retirement plan, because those funds can be used to pay for everything from daily living expenses to future long-term care needs.”
The RMMI data differs from a recent estimate of Freddie MacIt found that home equity owned by the baby boomer generation specifically could be as high as $17 trillion, or about half of all U.S. home equity.
The government-sponsored enterprise estimate is derived from this Federal Reserve data, according to the report released in December.
Although baby boomers own much of the nation’s housing stock, there will be a transfer to younger generations over time, Freddie said in its report. Three-quarters of respondents to the companion survey – regardless of race or gender – said they will leave their current home or its proceeds to a family member after their death.
